The SEC accused blockchain security firm Quantstamp of conducting an illegal initial coin offering in 2017. The company agreed to settle the charges and return the funds to the investors.
Quantstamp, a California-based company that provides automated smart contract auditing services, has been accused by the US Securities and Exchange Commission (SEC) of selling unregistered securities, QSP tokens.
The SEC announced in a statement that it has filed a criminal complaint against Quantstamp for raising over $28 million from nearly 5,000 investors in its ICO, which took place between October and November 2017.
However, the SEC said that Quantstamp did not register its ICO as required by federal securities laws and that QSP tokens qualify as securities under the Howey test.
Quantstamp agreed to settle the charges without accepting or denying the SEC's findings. The company will pay a $1,979,201 indemnity, a $494,314 pre-assessment interest and a $1 million civil penalty. It will also return the remaining QSP tokens to claiming investors and register the QSP as a security under the Securities Exchange Act of 1934.
*Not investment advice.