• The US Securities and Exchange Commission (SEC) has charged a California crypto project for a 2017 initial coin offering (ICO) that netted nearly $30 million.
• Quantstamp must pay a fine to the SEC of a total of $3,473,515, including $1.9 million in disgorgement, prejudgment interest of $494,314, and a civil money penalty of $1 million.
• As part of the settlement, Quantstamp has also agreed to transfer “the large block of QSP tokens” in their possession to an appointed fund administrator “to be destroyed or permanently disabled.”
SEC Charges California Crypto Project
The U.S. Securities and Exchange Commission (SEC) has charged blockchain auditing project Quantstamp for violating securities law when it sold its QSP token without properly registering with the agency during its 2017 initial coin offering (ICO). The ICO netted nearly $30 million from more than 5,000 investors.
Penalties and Fund Restoration
Quantstamp must pay a fine to the SEC of a total of $3,473,515 which includes $1.9 million in disgorgement, prejudgment interest of $494,314 and a civil money penalty of $1 million. To restore funds to investors harmed by the violation as much as possible, the settlement includes returning all disgorged funds plus interest earned through this process back to investors.
QSP Token Transfer & Destruction
As part of the settlement agreement between Quantstamp and the SEC, Quantstamp will transfer “the large block”of their QSP tokens in their possession to an appointed fund administrator who will either destroy or permanently disable them from circulation. This move is meant to protect remaining investors from potential financial losses due to future token sales outside compliance regulations set forth by the SEC and other regulatory bodies.
Development Ceased After Launch
According to the SEC order issued against Quantstamp’s ICO violations stated that after they launched their Protocol version 1 in March 2018 followed by an upgrade release in September 2018 and final version release in June 2019 they ceased further development on it shortly after its launch 18 months after they began their ICO sale period October 2017-November 2017 raising approximately 28$35million USD.
In conclusion The US Securities and Exchange Commission have decided upon fines towards quantstamps along with restoring some funds back into investor pockets as well as transferring all QSP tokens held by quantstamps into an appointed fund administrators hands who will then proceed with destroying or disabling them from circulation all together protecting any remaining investors assets form further financial loss due unregistered selling at later dates .