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The U.S. Securities Exchange Commission (SEC) has filed a lawsuit against prominent crypto influencer, investor, and entrepreneur Ian Ballina over an initial coin offering (ICO) dating back to 2018.

The SEC accused Ballina of buying $5 million worth of SPRK tokens from Sparkster Ltd. and for receiving 30% bonus chips before they started promoting it on social media. He did not disclose that he received an inducement to promote the ICO, the regulator charged in his lawsuit in federal court in Austin, Texas, according to media reports. reports said.

SEC case against Sparkster

Sparkster and its CEO Sajjad Daya made headlines in 2018 and 2019 for never launching SPRK tokens for which they had previously raised $30 million in ETH. In an interesting development, one of the Sparkster wallets from 2018 was first activated in May 2022, and 14,200 ETH tokens were exchanged for $22.7 million USDC.

According to the SEC’s statement Monday, Sparkster Ltd. raised $30 million from approximately 4,000 investors in an unregistered ICO between April and July 2018. The company and its CEO Sajjad Daya agreed to pay $35 million in a settlement to resolve investor claims of losses due to the unregistered SPRK offer, he added.

The SEC has apparently been on the trail of unregistered ICOs misleading investors during the ICO boom of 2017 and 2018. It has filed lawsuits in several such cases.

In February, the agency accused three people for allegedly defrauding more than $11 million through a ICOs in 2018. The famous American actor and martial arts specialist Steven Seagal was one of the promoters of this project.

Last year, the Commission prosecuted three Rivetz Group companies and Rivetz Corp CEO Steven K. Sprague for conducting a ICO not registered which raised $18 million. The SEC’s complaint states that the defendants offered and sold digital assets called RvT tokens to the public, including U.S. investors, between July and September 2017.

Ian Balina’s role in the failure of the ICO

Ian Ballina, 33, describes himself as a “world-renowned investor, entrepreneur, speaker and author” on his website and claims to have a master’s degree in computer science. He also worked with IBM Watson as a data scientist. Ballina is the founder and CEO of Token Metrics, “a data analytics platform for crypto that helps investors leverage machine learning to become smarter investors.”

In 2017, Ballina used Token Metrics analysis for crypto investments which saw his $20,000 fund swell into a $5 million portfolio of crypto assets, he reports on his site.

His website also carries his Response to the SEC, where he refutes the accusations as “baseless”. He calls his investment in SPRK “a private pre-sale buy” and a 30% bonus as a “volume-based discount from the public sale price.”

Ballina defends

Ballina defends himself against the SEC’s accusations in his court submission, where he describes the allegations made by the regulator as “an unfounded effort based on multiple misconceptions of fact and law…”. Excerpts from the submission are available on Ballina’s website. He also published his defense arguments via his Twitter account.

“We stand ready to fight these frivolous charges in the United States Supreme Court,” his legal team said on Ballina’s website.

He denies accusations that he invested $1.2 million in SPRK and said he only invested $106,915.50 and, like other investors in the scheme, he too was victimized. fraud.

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