According to Sparkster, “After much positive effort, we are pleased to announce that Sparkster entered into an administrative settlement agreement with the SEC.”
Sparkster Ltd. and its CEO, Sajjad Daya, have agreed with the U.S Securities and Exchange Commission (SEC) to settle charges stemming from the company's unregistered initial coin offering (ICO) in 2018.
In 2018, the ICO raised about $30 million from 4,000 investors in the U.S and abroad to help Sparkster develop its "no-code" software platform. Investors were also told that their tokens would appreciate.
However, the SEC issued a cease-and-desist letter to Sparkster and Daya, and they had agreed to pay a total of $35 million into a fund to be distributed to investors harmed by the SPRK ICO.
Sparkster stated in a post published on its website that they discovered a small number of participants who may have been Americans but slipped through their KYC procedure.
They promptly disclosed this information to the SEC and came to an administrative agreement.
According to Sparkster,
“After much positive effort, we are pleased to announce that Sparkster entered into an administrative settlement agreement with the SEC.”
SEC’s press release also said:
“The resolution with Sparkster and Daya allows the SEC to return a significant amount of money to investors and requires additional measures to protect investors, including the disabling of tokens to prevent their future sale.”
Sparkster will pay disgorgement of $30 million, prejudgment interest of $4.6 million, and a civil penalty of $500,000. The company also agreed to destroy any remaining tokens, remove them from trading platforms, and make the SEC's order available on its website. Daya will also pay a $250,000 civil penalty.
The SEC also filed charges against cryptocurrency influencer, Ian Balina, who Sparkster paid to promote its ICO. The SEC stated that Balina failed to disclose to investors that he received a 30% bonus on the tokens he purchased to promote the ICO. Balina is also accused of violating federal securities laws by selling SPRK tokens he purchased prior to the ICO in an unregistered sale.
While Sparkster's SEC settlement was quick, Balina's charges may take longer to resolve.
Balina has taken to Twitter to decry the "frivolous SEC charge" and expressed his excitement to "take this fight public.”
