Ian Balina Wells Submission Response to Baseless SEC Charges

Ian Balina Wells Submission Response to Baseless SEC Charges

In 2017-2018, Mr. Balina became internationally renowned as the person who parlayed a $20,000 initial cryptocurrency investment into a multi-million dollar portfolio. He did this by investing in digital assets and then writing and speaking about them. 

In 2018, he did a "World Tour," visiting offices of token issuers and interviewing founders and their team members. He also helped judge a "Shark Tank" style event for token-oriented startups. From fall 2019 to the present, he has developed a business under the name Token Metrics.

The Enforcement Division is now focusing on Mr. Balina because he allegedly did not disclose that there was a 30% volume-based discount from the public sale price for the private pre-sale purchase of Sparkster tokens. 

Additionally, Mr. Balina is charged with offering and selling unregistered non-exempt securities in the form of Sparkster tokens. 

This is the first time a private pre-sale purchase of a digital asset token has been accused of being "compensation" in exchange for publicity.

The Security and Exchange (SEC) Enforcement Division's proposed charges against Mr. Balina are an unfounded effort based upon multiple misconceptions of fact and law, enumerated below.

Summary of SEC Misconceptions (TLDR)

The charges proposed by the Enforcement Division rest on the following misconceptions:

  • Mr. Balina denies the SEC's accusations of investing $1.2 million in Sparkster tokens, claiming that he only invested $106,915.50 in Sparkster tokens, as confirmed by his blockchain activity.

  • There is no evidence that Mr. Balina received any extra money or benefits from Sparkster. Mr. Balina lost money from his investment with them.

  • The Enforcement Division does not have any precedent for treating a discount purchase of a commodity as compensation.

  • The SEC has only mentioned payments that celebrities have received from issuers as being objectionable and not the private sales themselves.

  • Ian Balina was a judge for a competition in Amsterdam. He ensured that all contestants had an equal chance to win the competition. A vote from the audience decided the competition. Ian did not get paid to favor any particular contestant.

  • The Sparkster token was discounted to people who invested early in the company. Dozens of other investors also received the same discount, regardless of their connection to the company.

  • Mr. Balina disclosed his involvement in Sparkster's token sale even though he didn't have to. He said he was an angel investor in blockchain technology and part of a group that invests up to $10 million in token sales. He also said that he had invested in the Sparkster private sale, whereby,  he, like others received a private sale discount for taking on the risk of investing early.

  • In May 2018, Mr. Balina bought some Sparkster tokens and helped publicize the winner of the Amsterdam contest. If it turns out that the representations of a developed system later proved to be overstated, Mr. Daya may have committed fraud. Still, Mr. Balina should not be held more responsible than the hundreds of others who were also induced by Mr. Daya's presentations to purchase Sparkster tokens.

Ian Balina Wells Memo Submission

Our complete legal Wells Submission is attached below.

Ian Balina Wells submission In the Matter of Sparkster Enterprise, Ltd. (HO-13851)


For the reasons stated above and in our Wells Submission, we believe the Enforcement Division's charges are baseless and set a bad precedent for the crypto industry.

Next Steps

This is the first time a private pre-sale purchase of a digital asset token has been accused of being "compensation" in exchange for publicity.

The SEC's demand for disgorgement of ill-gotten gains makes no sense because Mr. Balina had no gains at all. Further, at the time in question, May 2018, Mr. Balina had no reason to think the tokens in question were securities.

Mr. Balina did not receive compensation, and there is ZERO proof of said allegations. Nor did Mr. Balina profit from his purchase of Sparkster tokens. If anything, Mr. Balina is a potential victim of fraud and misrepresentation from the Sparkster team, like other investors.

We are prepared to fight these frivolous charges to the US Supreme Court.

If you would like to support our efforts to fight these baseless charges, you may do so below.

Press Emails: press@ianbalina.com

Legal Emails: mnavarre@bnsfirm.com