The US Securities and Exchange Commission (SEC) has fined cryptocurrency platform Sparkster and its CEO Sajjad Daya $35 million for conducting an unregistered ICO in 2018.
According to an SEC press release, Sajjad Daya orchestrated the SPRK token sale from April 2018 to July 2018, which raised $30 million from 4,000 US and foreign investors. The ICO organizers promised investors that the funds raised would be used to further develop the platform, and SPRK tokens would increase in price and become available on trading floors. The main claim of the regulator is that the SPRK tokens were not registered with the SEC and were sold as securities in violation of the US federal securities laws.
The agency also filed charges against investor Ian Balina, filing a lawsuit against him in the US District Court for the Western District of Texas. According to the SEC complaint, Balina purchased $5 million worth of SPRK tokens and promoted them on various social networks. He also organized an investment pool of at least 50 people to whom he offered to buy SPRK. However, Balina hid information from them that he received a reward of 30% of the invested amount for the promotion of tokens.
Sparkster management did not acknowledge or deny the SEC’s allegations. It agreed to destroy the remaining SPRK tokens, demand their removal from the trading floors, and also publish the SEC order on its website and social networks. In addition, Daya agreed to refrain from participating in the offering of any crypto assets for five years. The platform is required to return $30 million to investors, pay $4.6 million in interest before a court ruling, and pay $500,000 in administrative fines. Daiya himself must also pay a $250,000 fine.
Last week, the SEC accused the organizers of another cryptocurrency project, Chicago Crypto Capital, of an unregistered sale of securities. Earlier, the department imposed a fine on NVIDIA Corporation for concealing information about the role of cryptocurrency mining in the company’s income.
Source: Bits
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