SEC Charges Quantstamp $28 million For Conducting an Unregistered Initial Coin Offering
Quantstamp, a blockchain security firm, has been ordered by the U.S. Securities and Exchange Commission (SEC) to return $28 million raised in a 2017 unregistered initial coin offering (ICO).
On July 21st, the SEC accused Quantstamp of conducting an unregistered ICO, during which they sold their native QSP tokens to approximately 5,000 investors, raising a substantial amount for developing Ethereum blockchain technology for automatic security audits of smart contracts.
However, the SEC order revealed that after the ICO, Quantstamp allowed its tokens (QSP) to be traded on third-party digital asset trading platforms without registering the issuance and sale, raising concerns with regulatory authorities.
The press release states, "Quantstamp agreed to settle the charges by disgorging proceeds from the offering and paying a civil penalty."
Quantstamp agreed to pay nearly $2.5 million in disgorgement, prejudgment interest, and a $1 million civil penalty as part of the settlement. The firm settled the charges without admitting or rejecting the SEC's findings.
The decree mandates the establishment of a "Fair Fund" to compensate affected investors. Quantstamp has agreed to transfer its QSP token holdings to the administrator of the Fair Fund, with those tokens to be "permanently disabled or destroyed."
Quantstamp is a security-auditing protocol that focuses on addressing smart contract security concerns.
Its primary objective is to provide risk assessment and security services on the Ethereum blockchain, encouraging widespread blockchain adoption and protecting the decentralized internet from hacking and theft.
The project aimed to establish a distributed network of participants, including contributors, bug finders, validators,
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