The U.S. District Court for the Western District of Texas granted partial summary judgment in favor of the Securities and Exchange Commission (SEC) against crypto influencer Ian Balina. The court ruled that Balina conducted unregistered transactions involving SPRK Tokens, affirming that U.S. securities laws applied to his activities.

The SEC's complaint, filed on Sept. 19, 2022, alleged that Balina purchased $5 million worth of SPRK tokens from Sparkster, Ltd. in May 2018. He then organized an investment pool of approximately 68 individuals to whom he offered and sold SPRK tokens without registering the offering with the SEC, as required by federal securities laws.

Balina was accused of promoting SPRK tokens on YouTube, Telegram, and other social media platforms from May to July 2018 without disclosing a 30 percent bonus provided by Sparkster as compensation for his promotional efforts.

The SEC charged Balina with violating Sections 5(a) and 5(c) of the Securities Act of 1933 for conducting an unregistered offering and violating Section 17(b) for failing to disclose compensation received for his promotions.

The SEC sought partial summary judgment on the unregistered offering violation and requested a ruling that SPRK Tokens were offered and sold as securities.

In addition to charges against Balina, the SEC issued a cease-and-desist order against Sparkster Ltd. and its CEO, Sajjad Daya. The company contributed over $35 million to a fund for harmed investors and paid various other fees and penalties.

The promotional charges under Section 17(b) of the Securities Act were not decided as a matter of law, as Balina's motions for summary judgment on both SEC claims were denied by the court. Therefore, the promotional allegations remain unresolved.