The US Securities and Exchange Commission (SEC) dropped its lawsuit against crypto influencer Ian Balina. This is one of the latest retreats in crypto enforcement under the Trump administration. Balina allegedly promoted unregistered securities through an investment pool involving Sparkster (SPRK) tokens. The agency also dropped its investigation into PayPal’s stablecoin PYUSD, with no enforcement action taken. Despite the regulatory clearance, PYUSD is still a minor player with under $1 billion in market cap.
Meanwhile, legal accountability is still being pursuedfor other people involved in the crypto space.Avraham Eisenberg was sentenced to over four years in prison for unrelated criminal charges. Further sentencing is also pending for his $100 million Mango Markets exploit.
SEC Drops Case Against Ian Balina
The US Securities and Exchange Commission (SEC) moved to dismiss its lawsuit against crypto influencer and YouTuber Ian Balina. Thi sin one of the latest steps in the agency's apparent retreat from aggressive crypto enforcement under the Trump administration.
In a joint stipulation that was filed with a federal court in Austin on May 1, the SEC stated that it believes dropping the case is appropriate. It referenced the efforts of its internal Crypto Task Force but offered no specific rationale. The agency also clarified that this dismissal does not imply a shift in its position on other cases.
Balina is the CEO of Token Metrics and a well known figure in the crypto space with 140,000 followers on X. He was originally sued by the SEC in 2022 for allegedly promoting unregistered securities. The complaint stemmed from his involvement in forming an investing pool using Sparkster (SPRK) tokens during the 2018 initial coin offering (ICO) craze.
An ICO is a fundraising method in the cryptocurrency space where a project sells its native tokens to investors, typically in exchange for Bitcoin, Ethereum, or fiat currency. It's similar to an IPO (Initial Public Offering) in traditional finance but usually happens before the project is fully developed.
The SEC argued that Balina’s actions constituted an unregistered securities offering, with US-based investors participating via a network of Ethereum nodes predominantly located in the US.
In May of 2024, a court agreed with the SEC, and found that SPRK qualified as an investment contract, thus falling under US securities law. However, in a shift that reflects the changing political climate, the SEC has since rolled back numerous enforcement actions after President Donald Trump’s appointment of former crypto lobbyist Paul Atkins as the agency's chair.
Balina suggested in a March interview that the case's dismissal stemmed from a reorientation of agency priorities. He also described the new administration as “pro-crypto.”
The SEC and Balina jointly stated that dropping the case will preserve court resources and would not involve any costs or fees to either party. This dismissal is now the latest in a series of abandoned actions against major crypto entities including Coinbase, Ripple, Kraken, and OpenSea.
SEC Drops Probe into PayPal’s Stablecoin
The US SEC also recently concluded its investigation into PayPal’s US dollar-pegged stablecoin, PYUSD, opting not to pursue any enforcement action. In a regulatory filing that was shared on April 29, PayPal revealed that the SEC’s Division of Enforcement informed the company in February of 2025 that the inquiry was closed. The investigation began with a subpoena in November 2023 requesting documentation related to the stablecoin, and has now officially ended without consequence for the payments giant.
PYUSD was launched with the promise of being fully backed and 100% redeemable for US dollars through a mix of cash, cash equivalents, and short-term US Treasuries, and faced some difficulty gaining market share in an industry that is dominated by heavyweights like Tether and Circle.
Despite the regulatory clearance, PYUSD holds a market capitalization of just $912 million. This is less than 1% of Tether’s $148.5 billion. On the bright side, it still saw a 75% jump in circulating supply since the start of 2025, according to CoinGecko. That said, it is still very much below its peak of just over $1 billion in August 2024.
PYUSD’s all-time market cap (Source: CoinMarketCap)
PayPal is now focusing on growing the stablecoin’s footprint through incentives and partnerships. On April 23, the company introduced a loyalty offering that allows US users to earn 3.7% annually for holding PYUSD. This move is aimed at increasing its utility and adoption. Just a day later, PayPal announced a partnership with Coinbase to help promote PYUSD usage across the crypto ecosystem. PayPal CEO Alex Chriss said that the initiative is part of a broader effort to put PYUSD “at the center” of innovative digital finance solutions.
These developments happened alongside strong first-quarter financial results for PayPal. The company exceeded Wall Street expectations, and reported earnings of $1.33 per share against estimates of $1.16, with revenue reaching $7.8 billion. This is up 1% year-over-year.
PayPal also completed sizable share repurchases, which signals that there is confidence in its growth strategy.
Mango Markets Hacker Jailed
Others are not so lucky when it comes to escaping the claws of justice. Avraham Eisenberg was recently sentenced to 52 months in prison for charges related to child sexual abuse material, which is a case separate from his involvement in the 2022 Mango Markets exploit.
The sentencing was handed down on May 1 in the US District Court for the Southern District of New York, after Eisenberg’s guilty plea on the child pornography charge. Although the court initially planned to consolidate the sentencing for both the child pornography and Mango Markets fraud cases, the fraud-related sentencing still has to be finalized.
Eisenberg was arrested in Puerto Rico in December of 2022, and is also facing a conviction for orchestrating a high-profile exploit of Mango Markets, a decentralized crypto exchange. In October 2022, Eisenberg used a price oracle manipulation tactic to drain approximately $100 million in user funds. The attack caused the exchange’s native token, MNGO, to lose more than half its value in a day, which prompted Mango Markets to suspend deposits and attempt recovery.
Post from Eisenberg defending his actions
He defended his actions as legal trading strategies and claimed to have negotiated a settlement with the exchange to return part of the stolen funds. Despite this, federal authorities charged Eisenberg with commodities fraud and manipulation, and in April of 2024, a jury found him guilty of wire fraud, commodities fraud, and commodities manipulation.
His legal team still argues that the actions did not constitute cybercrime, but rather skillful trading, and have filed a motion for acquittal. Prosecutors, however, hold firm that the conviction was supported by overwhelming evidence. This is one of the cases that proves the increasing accountability for people exploiting vulnerabilities in the crypto industry.
