SEC orders Sparkster to return $35M to harmed investors of 2018 ICO
Ian Balina also faces charges
Crypto firm Sparkster and its CEO, Sajjad Daya, have agreed to a settlement with the U.S. Securities and Exchange Commission (SEC) over charges from its unregistered 2018 initial coin offering (ICO).
According to a press release, Sparkster and Daya raised $30 million from 4,000 investors “by offering and selling crypto asset securities called SPRK tokens” between April and July 2018. They told investors the money would help develop its “no-code” software platform, and promised that SPRK tokens would increase in value.
Sparkster and Daya received a cease-and-desist letter from the SEC on Monday and agreed to collectively pay more than $35 million into a fund for distribution to harmed investors.
Sparkster will pay $30 million in disgorgement, $4,624,754 in prejudgment interest, and a $500,000 civil penalty. Daya will also pay a $250,000 civil penalty.
Additionally, the firm has agreed to destroy its remaining tokens, remove its tokens from trading platforms, and publish the SEC’s order on its website and social media channels.
The SEC also announced that it has “charged crypto influencer Ian Balina for failing to disclose compensation he received from Sparkster for publicly promoting its tokens and failing to file a registration statement with the SEC for Sparkster tokens that he resold.”
Balina purchased $5 million SPRK tokens and promoted them on YouTube, Telegram, and other social media platforms. However, he failed to disclose that “Sparkster had agreed to provide him a 30 percent bonus on the tokens that he purchased, as consideration for his promotional efforts.”
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