SEC Accuses California Crypto Project of Conducting $28 Million ICO in 2017
The U.S. Securities and Exchange Commission (SEC) has taken legal action against a California-based crypto project for conducting an unregistered initial coin offering (ICO) in 2017, which resulted in nearly $30 million in funds raised.
The SEC accused the blockchain auditing project, Quantstamp, of violating securities law by selling its QSP token without proper registration with the agency. A settlement has been reached between the two parties. Entailing penalties and the return of some funds to investors. The ICO, held between October and November 2017. Attracted over 5,000 investors and generated $28.35 million. The SEC disclosed that Quantstamp ceased development of its security auditing protocol in 2019. After utilizing a significant portion of the ICO proceeds for its development and launch. The project will pay a total fine of $3,473,515, including $1.9 million in disgorgement, $494,314 in prejudgment interest. And a civil money penalty of $1 million.
The disgorgement and interest will be distributed to affected investors as feasible. Additionally, Quantstamp has agreed to transfer a substantial block of QSP tokens under its possession to an appointed fund administrator for destruction or permanent disablement as part of the settlement.
Clever Robot News Desk 27th July 2023
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