Ian Balina Faces ICO Suit Filed by the SEC

By Spencer Hulse Spencer Hulse has been verified by Muck Rack's editorial team
Published on September 19, 2022

Like any massive industry, crypto has its share of influencers and notable figures. Among them is Ian Balina, a crypto investor and YouTuber who once stood as a regular figure in crypto news as his followers and crypto wallet soared to great heights. Now, he is back in the spotlight due to an ICO suit filed by the U.S. Securities and Exchange Commission (SEC).

The suit is focused on Balina’s involvement in an unregistered initial coin offering (ICO) revolving around Sparkster. The ICO ended in July of 2018 and brought in $30 million from investors.

Sparkster claimed to be a no-code platform that aimed to let people build decentralized software in plain English. It promised to let users build without needing programming or blockchain knowledge, but since the ICO in 2018, its lofty promises have not been fulfilled.

Ian Balina took the role of investor, promoter, and influencer as he told people he could make the money with initial coin offerings. However, in this case, he did not make anyone money with SPRK tokens aside from himself.

According to the court documents, Ian Balina “failed to disclose the compensation he received from the issuer while he publicly promoted the tokens.” Additionally, he “failed to file a registration statement with the SEC for the tokens that he re-sold using an investing pool that he organized.”

The charges put forth by the SEC focus on his activity on social media, including YouTube and Telegram, where he promoted the SPRK token without revealing the fact that he received compensation in the form of $5 million. Specifically, it revolves around his communications regarding the ICO.

One notable point is that the SEC views transactions related to Ian Balina’s investing pool as occurring in the United States. The reasoning is that a majority of the nodes in the Ethereum blockchain are based within the U.S.

Ian Balina is not a stranger to controversy, though. The influencer and investor has faced accusations of “shilling” sub-par projects for money in the past. There have also been reports of him leveraging his influence with exchange partnerships. In those cases, he supposedly offered his influence and promotion if exchanges listed all of his projects.

In 2018, Ian Balina claimed that his wallet was hacked, which resulted in the loss of $2.5 million. The incident had no real evidence, and many claimed that he was lying about the hack. It only fueled the suspicions when he revealed that his private keys were stored in cloud storage, which many believed was oddly unsafe for someone at his level.

No evidence surfaced that he was lying, and Ian Balina himself has denied the allegations. He said that he spent years building his brand in the space and was continuing to do so. He then said, “Any suggestions that I faked my own hack to avoid taxes, have issues with the SEC and other such lies will be met with legal action.”

While it might not have been true at the time, Balina’s current circumstances certainly put him and the SEC on opposite sides. And considering his actions with the SPRK token, it seems as if he focused more on his own gain than the project itself.

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By Spencer Hulse Spencer Hulse has been verified by Muck Rack's editorial team

Spencer Hulse is a news desk editor at Grit Daily News. He covers startups, affiliate, viral, and marketing news.

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