Securities Regulation Daily Wrap Up, ENFORCEMENT—W.D. Tex.: SEC drops another crypto case, (May 2, 2025)
Law Firms Mentioned:Beatty, Navarre, Strama PC
By Anne Sherry, J.D.
The district court had ruled in the agency’s favor on liability.
The SEC agreed to drop another crypto enforcement case, citing the agency’s continued overhaul of the regulatory framework for crypto assets. The agency said that the dismissal of the case against an individual defendant “does not necessarily reflect the Commission’s position on any other case,” but it comes on the heels of another high-profile dismissal of the agency’s lawsuit against Dragonchain (SEC v. Balina, No. 22-cv-950 (W.D. Tex. filed May 1, 2025)).
The SEC in 2022 filed a complaint against Ian Balina for allegedly offering and selling crypto tokens in unregistered offerings. Balina had bought $5 million worth of SPRK tokens from Sparkster, Ltd. (which would itself become a target of SEC enforcement action) and resold them into an investing pool.
In 2024, the district court for the Western District of Texas granted partial summary judgment for the SEC, ruling that the tokens were offered and sold as securities under the Howey test. Balina sought and obtained interlocutory appeal of the order. The appeal is at the briefing stage before the Fifth Circuit.
The SEC said in its stipulation that dismissal is appropriate “as a policy matter.” The agency has withdrawn a slew of investigations and actions against crypto exchanges and other prominent industry participants. However, the case against Balina is unusual for involving an individual reseller, and because the SEC had gotten a court ruling of liability.
While the SEC did not sign or file the stipulation until May 1, the court filing shows that Balina’s counsel signed on March 12. This suggests that the SEC may be working through a backlog of agreements of dismissal, with more surely to be filed.
The case is No. 22-cv-950.
Attorneys: Ivan J. Snyder for the SEC. Michael L. Navarre (Beatty, Navarre, Strama PC) for Ian Balina.
MainStory: TopStory Blockchain Enforcement FedTracker Securities SecuritiesOfferings TexasNews