SEC drops lawsuit against crypto influencer Ian Balina

The U.S. Securities and Exchange Commission (SEC) has dismissed its lawsuit against cryptocurrency influencer Ian Balina. This victory ends a three-year legal fight and shows how the SEC handles crypto and online promoters.

Sparkster (SPRK) tokens were digital assets created by Sparkster Ltd and launched on the Ethereum blockchain as ERC-20 tokens. During the ICO, the company raised about $30 million by selling SPRK tokens in exchange for Ether (ETH). 

Sparkster planned to develop a decentralized cloud platform to allow users to build applications without coding. However, the project faced significant challenges, as the U.S. Securities and Exchange Commission (SEC) filed a suit against the company in 2022.

In that same year, the commission imposed a cease-and-desist order on Sparkster Ltd. and its CEO, Sajjad Daya, for the unauthorized offering and sale of crypto asset securities from April to July 2018. Despite attracting significant investments from 4,000 individuals, the project ultimately failed to meet its promises, resulting in the depreciation of the tokens.

A court injunction mandates Sparkster to return $30 million in disgorgement, along with $4,624,754 to cover prejudgment interest and a $500,000 civil fine. Additionally, the SEC imposed a $250,000 civil fine on Sparkster’s CEO, Daya.

Additionally, Ian Balina, a crypto influencer, marketed Sparkster tokens. The SEC said that Ian failed to inform the public about the payment he received from Sparkster for promoting its tokens and also failed to file a registration statement with the SEC for the Sparkster tokens he resold.

While Sparkster and Daya agreed to settle and to collectively pay more than $35 million into a fund as well as burn the remaining tokens, Balina continued to fight the charges, stating that the SEC was acting beyond its reach.

On May 1, 2025, the SEC and Balina asked that the federal court in Austin, Texas, dismiss the case with prejudice. The court granted the request. However, the SEC has not yet provided a reason for the dismissal.

This matter is one of many of the recent crypto-related legal retreats by the SEC. Since January 2025, the agency has backed off lawsuits involving Coinbase, Richard Heart’s HEX, PulseChain, and Robinhood’s crypto operations.