In a move reflecting its changing approach to crypto regulation, the U.S. Securities and Exchange Commission (SEC) has filed to dismiss its lawsuit against crypto influencer and YouTuber Ian Balina. The agency had previously accused Balina of conducting an unregistered securities offering through his promotion of Sparkster (SPRK) tokens.
SEC Withdraws Case With No Admission of Wrongdoing
On May 1, the SEC submitted a joint stipulation with Balina to a federal court in Austin, seeking dismissal of the case without costs or fees to either party. The document stated that dropping the case was consistent with the efforts of the SEC’s Crypto Task Force, but did not specify the exact reason for the decision. Notably, the SEC emphasized that the dismissal does not signal a broader change in how it views similar cases.
This development follows a broader trend under the Trump administration, which has brought a more crypto-friendly tone to U.S. regulatory policy. Balina commented in March that the agency’s reversal likely stems from a shift in priorities, stating, “Obviously, the new administration is pro-crypto.”
Background of the Case
The SEC initially sued Balina in 2022, alleging he violated securities laws by organizing an investing pool on Telegram in 2018 to promote SPRK tokens during the ICO boom. The regulator argued that this constituted an unregistered securities offering, citing the involvement of U.S. investors and Ethereum transactions processed by nodes heavily concentrated in the U.S.
In May 2024, a court sided with the SEC, ruling that the SPRK token sale was indeed an investment contract under U.S. law. The decision held that investors contributed funds to a common enterprise with the expectation of profit based on others’ efforts—hallmarks of a security.
Despite this ruling, the SEC has now chosen to end the legal battle.
This is just the latest case the SEC has opted to abandon under the Trump administration, which appointed former crypto industry figure Paul Atkins as SEC Chair. In recent weeks, the commission has dropped or ended investigations involving several major players in the space, including Coinbase, Ripple, Kraken, OpenSea, and PayPal’s stablecoin operations.
