![]() Still, the concentration of Ethereum nodes within the US is apparently enough for the SEC to consider any transactions on the network to have taken place within American borders.Īs such, a potential settlement between the SEC and Balina would place Ethereum within the regulator’s scope, Ian Corp, attorney at law firm Agentis told Blockworks via email, making it much easier for the agency to sue over Ethereum activity. Germany comes in second with almost 12% (912), followed by France with 4.5% (351).ĭue to Ethereum’s permissionless nature, anyone at all can connect their computers to the network by running client software, after which they become a node. The US is indeed home to 43% (3,371) of all Ethereum nodes (7,831), according to, more than any other country. Sparkster conducted its ICO on the Ethereum network, raising ether in return for SPRK, an ERC-20 token.ĭuring the alleged ICO scandal, US-based investors who sent their ether contributions to Balina’s pool were validated by a network of Ethereum nodes, described by the SEC as clustered “more densely” in the US than anywhere else. SEC: There’s more Ethereum nodes in the US than anywhere else ![]() On Monday, Balina said he turned down a settlement with the regulator, and that he intends to fight the SEC’s “frivolous” charges laid out in a 23-page complaint filed earlier this week.Īmong that complaint lies a snippet explaining how the SEC views Ethereum, particularly in relation to its power to prosecute based on actions within the network. The firm’s token is now completely worthless, although a revamped version of its website remains online. It now must return $30 million to investors and pay $5 million in fines. Network participants would be rewarded in SPRK for “contributing spare capacity on their personal devices to the Sparkster Decentralized Cloud.”īalina allegedly failed to disclose that he’d been paid to promote the ICO, which the SEC considers an unregistered securities offering. Sparkster’s whitepaper detailed plans to launch a marketplace for “no-code software,” powered by an advanced form of smart contracts. The SEC case against self-described crypto influencer Ian Balina has revealed how the regulator could further exert its jurisdiction over the Ethereum ecosystem: by claiming all transactions on the network occur in the US.īalina is accused of conducting an illegal sale of sparkster (SPRK) tokens during an initial coin offering (ICO) four years ago, which raised about $30 million from 4,000 investors. Any potential settlement between Balina and the SEC could set legal precedent moving forward.The SEC seems to believe it holds jurisdiction over Ethereum activity as most nodes are US-based.
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