Gladius Dissolves Firm Despite SEC’s Order to Refund ICO Investors

Gladius, a decentralized cybersecurity Startup Startup A company operating within its first stage of investing is known as a startup. While startups may give the impression that the company must be new, that is not always the case.Many companies can have this designation after nearly three years of existence. Typically, a company exits the startup status after a period between 3 to 5 years or after successful funding rounds where capital is acquired. Startups tend to derive out of the belief that there is a demand for a service or product which is c A company operating within its first stage of investing is known as a startup. While startups may give the impression that the company must be new, that is not always the case.Many companies can have this designation after nearly three years of existence. Typically, a company exits the startup status after a period between 3 to 5 years or after successful funding rounds where capital is acquired. Startups tend to derive out of the belief that there is a demand for a service or product which is c Read this Term, dissolved the company ignoring the Securities and Exchange Commission's (SEC) order to reimburse the inventors of the project.

The decision was announced by Alex Godwin, Gladius’ co-founder and chief technology officer, on Friday on the firm’s official Telegram channel. The dissolution decision violated a refund order imposed on the company by the SEC earlier this year.

“We regret to inform you that Gladius Network LLC has ceased operations effective immediately and has filed for dissolution. Despite our best efforts, the company no longer has funds to continue operations,” the company stated.

No action by the market regulator?

Gladius raised around $12.7 million in 2017 in a token sale by selling its native token. The Initial Coin Offering (ICO) Initial Coin Offering (ICO) An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Acco An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Acco Read this Term) was conducted when there is a hype in the market for such a fundraising technique.

However, the multi-million funding attracted the attention of the US market regulator, which charged the company in February for selling unregistered securities. The allegations came after the company self-reported to the regulator.

This also resulted in a lenient action on the company by the market watchdog.

“The SEC did not impose a penalty because the company self-reported the conduct, agreed to compensate investors, and will register the tokens as a class of securities,” the regulator noted.

Despite the SEC's action, Gladius was one of the three firms which missed the deadline to make repayment to the investors.

The recent decision of the company also created a stir among the investors who are looking at it as an exit scam and are concerned about losing their whole investment.

Gladius ICO participants: your money is officially gone. Company dissolves after SEC order to refund investors isn’t enforced. https://t.co/9hg3URuAG4 pic.twitter.com/eSEsjEPZiR

— Kevin (@oOultimateOo) November 24, 2019