TLDR:
- SEC filed to dismiss its unregistered securities case against crypto YouTuber Ian Balina
- Balina was CEO of Token Metrics and had been accused of improper promotion of Sparkster (SPRK) tokens in 2018
- The court previously ruled SPRK tokens were securities under the Howey Test
- This dismissal is part of a broader trend of the SEC dropping crypto-related cases under the new administration
- Sparkster and its CEO had previously settled with the SEC for over $35 million
The Securities and Exchange Commission (SEC) has moved to dismiss its lawsuit against crypto influencer Ian Balina, marking the latest in a series of withdrawn crypto enforcement actions under the current administration. The news comes as the regulatory landscape for cryptocurrency continues to shift in the United States.
According to a May 1 joint stipulation filed in an Austin federal court, the SEC stated it “believes the dismissal of this case is appropriate,” citing the work of the agency’s Crypto Task Force. The filing argued that ending the case would conserve court resources, with neither party responsible for costs or fees.
Balina, who serves as CEO of Token Metrics and has 140,000 followers on X (formerly Twitter), had been sued by the SEC in 2022. The case centered on allegations that he conducted an unregistered securities offering of Sparkster (SPRK) tokens when he formed an investing pool on Telegram in 2018.
The SEC had claimed that US-based investors participated in Balina’s investing pool using Ether (ETH). The agency pointed out that Ethereum nodes are “clustered more densely in the United States than in any other country” as part of its jurisdiction argument.
The Court’s Earlier Ruling
In May 2024, the court sided with the SEC on a key point. It ruled that SPRK tokens were indeed investment contracts under US securities laws. The court found that investors had pooled money into a common enterprise expecting profits due to the efforts of others.
The court also determined that Balina had acted as an underwriter by redistributing tokens through his investment pool. While Balina attempted to have the case dismissed entirely, the judge allowed the SEC’s charge under Section 17(b), regarding undisclosed promotion, to proceed.
It’s worth noting that Sparkster and its CEO had previously settled with the SEC in 2022, agreeing to pay over $35 million to affected investors.
Balina had already hinted at this outcome in March. In a post on X, he told followers “it’s official” that the SEC was dropping the case, framing it as a broader victory for fairness in the crypto space. “This was never just about me,” he added.
His AI-driven investment research platform, Token Metrics, echoed this sentiment, suggesting the dismissal could point to a larger shift in enforcement trends.
While the commission did not provide a specific reason for wanting to dismiss its case, it stated that its decision “does not necessarily reflect the Commission’s position on any other case.”
Part of a Broader Trend
The move to drop charges against Balina is part of a larger pattern of the SEC stepping back from crypto enforcement actions. Over the past month, the agency has dropped several cases and abandoned multiple investigations against crypto firms.
The list of companies no longer facing SEC action includes major players like Coinbase, Ripple, Kraken, OpenSea, and PayPal’s stablecoin project. These cases involved various allegations, from unregistered securities sales to broader regulatory violations.
Balina told Cointelegraph in March that the SEC had informed him it would recommend the court dismiss the case. He claimed the agency’s actions were based on a shift in priorities.
“Obviously, the new administration is pro-crypto,” Balina said. The SEC has seen a change in leadership under US President Donald Trump, who appointed former crypto lobbyist Paul Atkins to chair the agency.
On April 23, the commission also dropped similar charges against Hex founder Richard Heart, further confirming the trend of reduced enforcement against crypto figures and companies.
The SEC’s decision to drop the Balina case represents another example of how the regulatory approach to cryptocurrency is evolving under the current administration.
