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Cryptocurrency Analyst Was Paid $5 Million to Push ICO, SEC Says - BLOOMBERG

SEPTEMBER 19, 2022

(Bloomberg) -- The founder of a cryptocurrency investment research firm was accused by the SEC of promoting an initial coin offering without disclosing that he had been paid $5 million to do so.

Ian Balina, 33, promoted the SPRK token on social media platforms including YouTube and Telegram without revealing that he had been paid by the company that offered it, the Securities and Exchange Commission said in a suit filed Monday in federal court in Austin, Texas. 

While the SEC didn’t identify Balina’s firm, the description matches that of Token Metrics, an Austin-based firm that provides “AI-based cryptocurrency ratings and price predictions.” Balina’s bio on the site describes him as a “former IBM Watson Analytics evangelist” who has “built million-dollar businesses from the ground up.”

Balina, a self-described crypto asset investor, promoter and influencer, documented his investment process and research on YouTube and other social media outlets through an online diary called “Diary of a Made Man.”

The SEC also accused Balina of organizing an investing pool of about 50 people and offered them the chance to buy tokens from him upon their release without registering. 

Balina’s lawyer, Stephen Galebach, didn’t immediately respond to an email seeking comment. Token Metrics also didn’t immediately respond to a request for comment.

The SEC said the company behind SPRK, Sparkster Ltd., a software development company incorporated in the Cayman Islands, raised about $30 million from almost 4,000 investors in an unregistered offering that took place between April and July 2018. 

In addition to paying him $5 million, Sparkster also gave Balina a 30 percent bonus on any tokens he bought, the regulator said in the suit.

The case is US v Balina, 22-cv-950, US District Court, Western District of Texas (Austin.)


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