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The US Securities and Exchange Commission (SEC) continues to scrutinize cryptocurrency companies, and the penalties are growing exponentially. Ripple, Binance, Coinbase, and many other cryptocurrency companies have been sued by the SEC, putting them in a difficult position. The latest target of the SEC is QuantStamp (QSP).
SEC Hits QSP with Penalties
According to the SEC, Quantstamp will pay $3.5 million to the SEC. Quantstamp will pay this amount for admitting to conducting unregistered securities sales. The SEC considers the initial coin offerings (ICOs) of many cryptocurrencies to be unregistered securities sales, and this statement is the biggest evidence of that.
The detailed statement published by the SEC reveals that the cryptocurrency project raised approximately $28 million during the period of October and November 2017. This revenue from the QSP token sale was made possible with the participation of 5,000 investors, including those from the US. This is exactly what concerns the SEC. The SEC’s investigation also found that Quantstamp initially intended to manage the ICO process in a decentralized manner, but it ended up being centralized. In addition, the SEC highlighted that there were individuals who purchased QSP with the expectation of making a profit, which clearly violated securities regulations.
Quantstamp is currently ranked as the 996th largest cryptocurrency based on total market capitalization and is considered a relatively obscure cryptocurrency. However, it has a trading volume of $43,000 in the past 24 hours and a market capitalization exceeding $8 million. The fact that QSP, which only raised $28 million in its initial funding, has reached this point raises concerns.
Why Didn’t QSP Price Plummet?
The SEC states that they imposed this penalty through a mutual agreement. This indicates that the Quantstamp team acknowledged the allegations. Currently, the QSP price is nearly 98% lower than its all-time high of $0.78, and it has lost a significant portion of its value. Therefore, the impact of this lawsuit on QSP’s price was minimal, and the QSP market already appears to be empty.
