A blockchain security company called Quantstamp has agreed to repay $28 million raised in a 2017 initial coin offering (ICO) in response to complaints from the US Securities and Exchange Commission (SEC).
The SEC charged Quantstamp with holding an unregistered ICO for securities backed by cryptographic assets. The company sold its QSP tokens to over 5,000 investors during the ICO, raising roughly $28 million.
Quanstamp intended to use the money to create and promote its automated platform for security audits of smart contracts.
Quantstamp consented to a cease-and-desist order and a disgorgement payment of $1,979,201, prejudgment interest of $494,314, and a $1 million civil penalty as part of the settlement.
Quantstamp will create a "Fair Fund" to repay money to impacted investors. Additionally, the company will send its own QSP tokens to be permanently deactivated or destroyed.
Quantstamp no longer runs or actively promotes smart contract security auditing.