The U.S. Securities and Exchange Commission (SEC) has charged blockchain security company Quantstamp for allegedly conducting an unregistered securities offering through its $28 million initial coin offering (ICO). The SEC claims that Quantstamp misled investors by promising that the value of its token, QSP, would increase with the success of the project. Despite claiming that the sales were exempt from registration, Quantstamp failed to satisfy the requirements for any exemption. As part of a settlement, Quantstamp has agreed to pay almost $2.5 million in disgorgement and prejudgment interest, as well as a $1 million civil penalty. The company has also agreed to establish a “Fair Fund” to reimburse affected investors and transfer its own QSP token holdings to the administrator of the Fair Fund. It is worth noting that Quantstamp no longer administers or actively supports its smart contract security auditing platform since June 2019.

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