Distributed cybersecurity startup, Gladius has dissolved the firm without complying with its pledge to the U.S. Securities and Exchange Commission’s (SEC) to reimburse investors.
Gladius, which started as a blockchain cybersecurity service provider, conducted a token sale in late 2017, which saw the firm raise about $12.7 million in cryptocurrency.
The firm’s tokens were, however, classified as securities by the SEC in a ruling published on February 20, 2019, which led to the firm receiving a cease-and-desist proceeding from the regulator.
At the time, the SEC did not issue any penalty because the company “self-reported the conduct,” while promising that it will compensate the ICO investors and register the tokens as securities.
Despite several extensions given to Gladius by the SEC to refund investors and register the tokens as securities, Gladius, however, took the easy way out by filing for dissolution as the firm claimed that it has run out of funds.
According to a message sent by the firm’s co-founder and chief technology officer, Alex Godwin to the project’s official Telegram Group, it reads:
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.
Godwin also added that the codebase used by the company will remain active for the next three months and can be utilized by any of the investors.
Since the announcement was made, several investors have expressed dissatisfaction with the SEC and the firm. One of the investors commented on Reddit platform under the username Bitttburger, saying:
“The SEC doesn’t bother enforcing its judgments. And instead spent the next year and a half granting them extensions.
As at press time, investors of the project under the guise of Gladius Rektiers, are currently discussing the next approach to take.
In a similar development, Coinfomania reported in September that UAE and Nigerian-based exchange Satowallet collapsed after raising at least $1 million from investors.