The U.S. Securities and Exchange Commission (SEC) is filing charges against crypto influencer Ian Balina for his alleged involvement in the 2018 initial coin offering (ICO) of the SPRK token.
In a complaint filed with the U.S. District Court for the Western District of Texas on September 19th, the SEC says it is taking legal action against Balina for allegedly promoting and selling the crypto asset, which the regulator claims is an unregistered security.
The SEC further accuses the YouTuber of failing to disclose the amount he received from the coins issuer, software development firm Sparkster, and having his own unregistered offering of SPRK.
Although he agreed to receive a 30% bonus from Sparkster on the tokens he purchased in the Sparkster Offering, Balina never publicly disclosed the consideration he received for his promotion.
Balina also organized on Telegram an investing pool of about fifty individuals. After he agreed to purchase the SPRK tokens from Sparkster, Balina offered members of the investing pool the opportunity to purchase SPRK tokens from him upon their release.
The offering, which was conducted through the Ethereum (ETH) network, raised $30 million from nearly 4,000 investors from the US and abroad who paid in ETH.
In a bid to establish US jurisdiction over the case, the SEC says Ethereum-based transactions are deemed to have occurred in the country because a large percentage of the networks nodes are based here.
The US-based investors in Balinas pool irrevocably committed to the transaction when, from within the United States, they sent their ETH contributions to Balinas pool. At that point, their ETH contributions were validated by a network of nodes on the Ethereum blockchain, which are clustered more densely in the United States than in any other country. As a result, those transactions took place in the United States.
The SEC files the complaint as it takes a tougher stance on crypto hampering institutional entry into the digital asset space. During a congressional hearing last week, SEC chairman Gary Gensler said that most crypto firms are transacting in securities and have to register with the commission. He also hinted that Ethereum could now be classified as a security after the completion of its merge to proof-of-stake.
Check Latest News Headlines
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/ValDan22/VECTORY_NT
This article was originally reported on The Daily Hodl.