Gladius, a decentralized cybersecurity startup, 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) 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.
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“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.
— Kevin (@oOultimateOo) November 24, 2019