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SEC charges Quantstamp for 2017 initial coin offering

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The U.S. Securities and Exchange Commission (SEC) charged Quantstamp, a well-known blockchain security firm, with conducting an unregistered Initial Coin Offering (ICO) on July 21.

The SEC said that, in October and November 2017, Quantstamp raised over $28 million by selling QSP tokens to about 5,000 investors, including those in the United States. In the press release, the SEC states it specifically charged the company “for conducting an unregistered initial coin offering (ICO) of crypto asset securities.”

Failure to register

Quantstamp intended to use those funds to build and promote an automated smart contract security auditing platform. The firm emphasized the platform’s potential, led QSP investors to expect their token value to increase in line with the platform’s success, and made efforts to list the tokens for trading on third-party exchanges.

Though Quantstamp completed its automated smart contract security auditing platform in June 2019, it later ended operations and support for the platform.

Now, the SEC alleges that Quantstamp failed to register its offers and sales of QSP and says that those sales constituted securities. Quantstamp claimed exemption from registration; however, the SEC alleges that the company did not meet the criteria necessary for such exemption.

Quantstamp has now agreed to settle the charges. This will involve returning the proceeds from the offering and paying a civil penalty. Without admitting or denying the SEC’s findings, Quantstamp agreed to a cease-and-desist order and to pay a disgorgement of $1.98 million, prejudgment interest of $494,314, and a civil penalty of $1 million.

The SEC’s order also establishes a ‘Fair Fund,’ which will return funds paid by Quantstamp to affected investors. Quantstamp will also transfer all QSP that is in its control to this fund; those funds will be permanently disabled or destroyed.

The company has also been instructed to publish a notice of the order on its website and to send the order to crypto trading platforms that list its token.

SEC has targeted other firms

The order is the latest of several enforcement actions from the U.S. SEC. The agency sued both Coinbase and Binance in June, took action against TRON and related parties in March, and compelled Kraken to discontinue its staking service in February.

The SEC’s suit against Ripple suffered a setback earlier this month when a federal judge ruled that, in at least some cases, sales of XRP did not constitute the sale of securities. Institutional investments in XRP, however, were considered as such. The SEC is expected to appeal the decision.

The post SEC charges Quantstamp for 2017 initial coin offering appeared first on CryptoSlate.

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SEC Goes After Quantstamp Over $28M ICO; Orders Refunds

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The U.S. Securities and Exchange Commission (SEC) has filed charges against the California-based blockchain firm Quantstamp over an unauthorized initial coin offering (ICO) that raised $28 million in 2017. Following the charge, the company has consented to refund the ICO proceeds:

“Without admitting or denying the SEC’s 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 SEC order stipulates that Quantstamp’s ICO, carried out in the final months of 2017, collected over $28 million through the sale of QSP tokens to an estimated 5,000 investors. The firm’s original aim was to use these funds to further its development and marketing endeavors for its automated smart contract security auditing platform.

Notably, the SEC order also reveals that Quantstamp has stopped operations and support for its automated smart contract security auditing platform since June 2019.

The SEC contends that these tokens are securities, and their sale and offering were unregistered, resulting in a breach of federal laws:

“Quantstamp offered and sold the QSP tokens as investment contracts, and therefore securities.”

As part of the settlement with the SEC, Quantstamp has agreed to a cease-and-desist order and is required to pay a total of $3.47 million. This includes $1.98 million in disgorgement, $494,314 in prejudgment interest, and a civil penalty of $1 million.

In addition to this, the SEC’s order mandates the creation of a Fair Fund for reimbursing the aggrieved investors. Quantstamp has agreed to transfer its QSP token holdings to the Fair Fund’s administrator.

These tokens will subsequently be “permanently disabled or destroyed.”

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Quantstamp (QSP) may rally to $0.1 – Right here is how this may occur

As commerce quantity for Quantstamp (QSP) fell sharply during the last two days, the value motion has considerably slowed. It looks as if the coin is attempting to consolidate the features made during the last week earlier than attempting to rise once more. However how far can it actually go? Nicely, we’ll talk about this additional however first, listed below are the most recent…