The U.S. Securities and Exchange Commission (SEC) has charged a California crypto project for a 2017 initial coin offering (ICO) that netted nearly $30 million.
According to a new SEC order, the regulator accused blockchain auditing project Quantstamp of violating securities law when it sold its QSP token without properly registering with the agency.
The two parties have reached a settlement, which includes penalties and the restoration of some funds to investors.
Quantstamp sold QSP between October 2017 and November 2017 to more than 5,000 investors and raised $28.35 million, according to the SEC.
The SEC says that Quantstamp stopped developing the ecosystem’s security auditing protocol in 2019, after using most of the ICO’s proceeds to develop and launch it.
“Quantstamp publicly released the first version of the Protocol in March 2018, six months after the offering. It released an upgrade in September 2018, and a final version in June 2019, approximately 18 months after the offering.
In total, Quantstamp used over $26 million of the offering proceeds for the development of the protocol. After the June 2019 final release, Quantstamp ceased further development of the protocol, and no longer operates nor lends substantial support to the protocol.”
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.
“The disgorgement and prejudgment interest ordered … will be distributed to harmed investors to the extent feasible.”
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.”
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Fathurdavega/Chuenmanuse
The post SEC Charges California Crypto Project for $28,000,000 ICO in 2017 appeared first on The Daily Hodl.
