SEC files charges against Quantstamp for $28M initial coin offering

Blockchain security company Quantamp is set to return $28 million raised in a 2017 initial coin offering following charges brought by the United States Securities and Exchange Commission (SEC). The U.S. company revealed that it had officially charged the California-based firm on July 21 for performing an unregistered preliminary coin offering of “crypto asset securities”. According to the declaration from the SEC, Quantstamp agreed to settle the charges.The SECs order outlines how Quantstamps ICO, which happened in October and November 2017, raised over $28 million by selling its native QSP tokens to some 5,000 investors. Source: SEC filing versus Quantstamp.The platform intended to utilize its ICO proceeds to “market and develop” its automatic clever contract security auditing platform. The SEC order highlighted its belief that Quantstamp emphasized the “big market capacity” of its service, which led to QSP buyers to expect the worth of their tokens to appreciate in value. According to the SEC, Quantstamp stopped working to register its offering and sale of QSP tokens, which the agency deemed to be securities. “The SECs order discovers that Quantstamp broke the registration provisions of the federal securities laws. Without confessing or rejecting the SECs findings, Quantstamp agreed to a cease-and-desist order and to pay disgorgement of $1,979,201, prejudgment interest of $494,314, and a civil penalty of $1 million.”The outcome of the order also arrangements the establishment of a “Fair Fund” to return funds to affected investors. The firm also concurred to transfer its own QSP token holdings to the Fair Fund administrator, with the tokens set to be “permanently handicapped or damaged”. The SEC order also keeps in mind that Quantstamp no longer runs or actively supports the automatic clever contract security auditing following its deployment in June 2019. Cointelegraph has reached out to Quanstamp for further information following the SECs Order.