YouTuber and ICO promoter Ian Balina charged by the SEC

Crypto investor and YouTuber, Ian Balina has been charged in relation to his association with the ICO for Sparkster. Balina was an active ICO promoter in 2017 and 2018. The complaint was filed this week in the Western District of Texas’s Austin Division, the U.S. Securities and Exchange Commission (SEC).

The initial coin offering for Sparkster raised $30 million from the wider community. Balina promoted an unregistered securities offering for SPRK tokens through his YouTube Channel, ‘Diary of a Made Man’ in 2018.

The SEC is taking action around his promotional activities concerning the ICO which focus on his YouTube channel and other social media channels of communication.

YouTuber Balina is accused of promoted the SPRK token offering without revealing that he had been compensated by the firm for his promotions.

Ballina responded to the charge in a 19 part Twitter thread stating that the charges were baseless and making his formal response public.

Court documents from the SEC reveal the reasoning behind the action ”

Ethereum transactions in the United States

Built on Ethereum, the Sparkster project was positioned to be a decentralized cloud network. However, the project never developed a working product or service. 

According to Ethernodes, over 43% of Ethereum nodes are currently situated in the United States.

In the filing this week, the SEC claimed that Ethereum transactions take place in the United States due to the fact that a majority of node validators are located in the country. The SEC has stated that as Ethereum nodes “are clustered more densely in the United States than in any other country.” As a result “those transactions took place in the United States.”

SEC Chair Gary Gensler damped the Ethereum merge celebrations earlier this week as he indicated that the network’s software features could lead it to be considered a security in the future.

This builds on Genslers previous statements that push toward crypto tokens being considered securities. However, the U.S. regulator has made it clear that Bitcoin comes under the supervision of the CFTC, the Commodity Futures Trading Commission. Hence, Bitcoin is treated as a commodity.

As more regulators focus on the long-term applications of crypto in the world of Web3 there will be increased commentary on how and what regulation should be in place for new ICOs.

Lisa Gibbons
Lisa Gibbonshttp://www.blocktelegraph.io
Lisa Gibbons is the Editorial Director at BlockTelegraph.

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