A blockchain-security company, Quantstamp will pay $28.35 million, raised in the course of the 2017 initial coin offering, after SEC charges.
The agency filed claims against the firm on July 21 for conducting an unregistered ICO of ‘cryptosecurities.’ According to the Commission’s statement, Quantstamp agreed to settle the charges.
According to the SEC, the company raised funds by selling native QSP tokens to roughly 5,000 investors. Quantstamp believed in the ‘significant market potential’ of its service, which led buyers to expect an appreciation in the token’s value, the regulator notes.
“The SEC order finds that Quantstamp violated the registration provisions of federal securities laws. Not admitting or denying the regulator’s findings, the firm agreed to a cease-and-desist order and a payment of $1.97 million, including costs totaling $494,314 up to the entry of the decision and a civil penalty of $1 million,” the statement said.
The settlement agreement provides for the creation of a ‘fair fund’ to return funds to affected investors. The company is also prepared to transfer its own QSP to an administrator for permanent ‘deactivation or destruction’.
The SEC added that Quantstamp no longer uses automated security audits of smart contracts after their deployment in June 2019.
In April 2023, a court ordered Hydrogen Technology Corp. a penalty of $2.8 million under an SEC action over token price manipulation.
In March, the regulator secured a favorable verdict against John and Jonatina Barksdeylov regarding the creation of a fraudulent Ormenus Coin scheme. They will pay $102 million.
In July, CFTC fined the Bitcoin exchange Digitex and its CEO Adam Todd $15 million for fraud and unlicensed activity.