On Monday, the Securities and exchange Commission filed a regulatory action against Ian Ballina. The computer engineer and data scientist has appeared prominently on financing programs such as CNBC, Forbes, Business Insider, and Entrepreneur Magazine.
SEC Hammers Sparkster Coin for Improper Disclosures
The SEC filed the civil complaint in Austin, Texas, over the initial coin offering for the Ethereum-based crypto token Sparkster. The commission alleges improper consumer disclosures regarding Ballina’s compensation from the 2018 ICO:
“[Ballina] claimed he could help people ‘make millions with initial coin offerings…’ [Further he] failed to disclose the compensation he received from the issuer while he publicly promoted the crypto tokens. He likewise failed to file a registration statement with the SEC for the crypto tokens that he re-sold using an investing pool that he organized.”
On the well known cryptocurrency price tracker, CoinMarketCap, the page for SPRK has no price listed. Further, it reveal, “Market data is untracked. This project is featured as an ‘Untracked Listing.’
That means the Ethereum (ETH) crypto token doesn’t meet all of CMC’s guidelines for tracked listings. These include leveraging cryptography and decentralized consensus mechanisms to maintain peer-to-peer (P2P) ledgers for digital currency. CMC likewise only tracks cryptocurrencies with a functional website and block explorer. Furthermore, coins “ needs be traded publicly, and actively traded on at least one (1) exchange (with material volume).”
Sparkster CEO Sajjad Daya reached a settlement to pay out $35 Million to defrauded investors. That settlement came on Tuesday, just a day after the SEC filed its complaint.
Takeover Authority Over All Ethereum (ETH) Transactions?
Following the dust settled on the civil action, Wednesday’s closer look at the suit by the industry yields an interesting possibility. The SEC appears to be gearing up to take all Ethereum (ETH) crypto tokens and transactions under its jurisdiction.
In the 69th section of the filing, the commission advanced a novel legal theory regarding the regulation of cryptos:
“[The investors] sent their ETH contributions to Balina’s pool. At that point, their ETH contributions were validated by a network of nodes on the Ethereum (ETH) blockchain tech, which are clustered more densely in the United States than in any other country. Consequently, those transactions took place in the United States. [bold emphasis added]”
While Sparkster is headquartered in the Cayman Islands, the SEC’s theory is that the plurality of Ethereum (ETH) nodes in the United States means all Ethereum (ETH) crypto tokens and transactions take place in the United States. This is another prong in an SEC sweep to take jurisdiction over Ethereum (ETH). That includes a recent warning by the SEC chair that the merge to proof-of-stake makes Ethereum (ETH) a security.
The post The SEC is Angling to Take Authority Over All Ethereum (ETH) Transactions in SPRK Suit (Opinion) appeared 1st on CryptoPotato.
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