Quantstamp Agrees to Pay $28M to Securities and Exchange Commission

Blockchain security firm Quantstamp has agreed to a cease-and-desist order and pay the SEC a total of $1.97 million, including pre-judgment costs of $494,314 and a civil penalty of $1 million, to settle charges of conducting an unregistered Initial Coin Offering (ICO) of cryptocurrency securities to approximately 5,000 investors in 2017.

According to the order issued, the company has agreed to a ‘fair fund’ that shall be set up to return funds to affected investors, and has offered its own QSP tokens to the SEC for permanent disabling or destruction.

The SEC also noted that since the release of its automated smart contract security auditing technology in June 2019, Quantstamp has stopped using it.

This marks the latest in a series of fines issued by the agency to firms engaged in fraudulent activity, such as the $2.8 million fine issued to Hydrogen Technology Corp. in April 2023, the $102 million order issued to John and JonAtina Barksdale for their creation of the Ormesus Coin scam in March, and the $15 million penalty imposed on Digitex and its CEO Adam Todd in July for fraud and unlicensed activity.