Sparkster Ordered to Pay $35 Million Over Unregistered Crypto Asset Offering

Posted on October 5th, 2022 at 1:06 PM
Sparkster Ordered to Pay $35 Million Over Unregistered Crypto Asset Offering

From the Desk of Jim Eccleston at Eccleston Law.

The Securities and Exchange Commission (SEC) has issued a cease-and-desist order against Sparkster and its CEO, Sajjad Daya, over an unregistered crypto asset offering that spanned from April 2018 through July 2018.

The SEC additionally charged crypto influencer Ian Balina for failing to disclose compensation he collected from Sparkster for promoting the offering. Sparkster and Daya agreed to a settlement with the SEC to pay at least $35 million into a fund for distribution to harmed investors. According to the SEC, Sparkster and Daya raised $30 million from at least 4,000 investors by selling crypto asset securities, known as SPRK tokens, to fund the development of Sparkster’s “no-code” software platform. Sparkster and Daya informed investors that SPRK tokens would increase in value and that they would make the tokens available on a crypto trading platform, according to the SEC’s order. The SEC also determined that Sparkster failed to register the SPRK tokens with the SEC, and that a registration exemption did not apply in this case.

Furthermore, while Balina purchased $5 million worth of SPRK tokens and subsequently promoted the tokens on YouTube, Telegram and other social media outlets between May 2018 and July 2018, the SEC alleged that Balina failed to disclose that Sparkster had agreed to pay him a 30% bonus on the tokens that he purchased, which constituted compensation for his promotional scheme.

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

Tags: eccleston, eccleston law, advisors, law, crypto

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