ICO issuer Gladius ceases operations amid SEC refund order

Gladius Network has ceased operations, the company revealed in an announcement on its website and through its official Telegram channel. The distributed cybersecurity startup cited lack of funds as the reason for the dissolution. By ceasing operations, the company has defied the SEC’s order to refund its investors.

Gladius has been on the SEC’s radar since it issued its ICO in which it raised $12.7 million. The startup violated securities laws with its ICO, with its token sale being termed as a security offering by the regulator. At a time when the SEC was cracking down on several other blockchain startups, Gladius took the initiative and self-reported, an action that the SEC lauded.

However, the company has failed to adhere to its agreement with the regulator. As CoinGeek reported recently, Gladius was one of the startups that the SEC claimed had missed the repayment deadline.

Gladius revealed the dissolution on its Telegram channel and on its website, citing lack of funds. This is despite raising over $12 million around two years ago. Part of the announcement stated, “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.”

For the developers who would like to use the company’s code, you have three months to access it, the company revealed. The announcement concluded, “Our code will remain available on GitHub for the next three months. We still believe in the power of our technology, and if anyone in the community is interested in pursuing it we welcome it.”

Gladius was a cybersecurity startup that aimed at using blockchain technology to bring an end to distributed denial of services (DDoS) attacks. Built on the Ethereum blockchain, the startup let users earn Gladius tokens for contributing their bandwidth to help enterprises mitigate DDoS attacks.

Earlier this year, Gladius grabbed the headlines by becoming the first blockchain startup to self-report to the SEC. The company agreed to compensate its investors and register its tokens as a class of security. The SEC praised the initiative and even exempted the company from any punitive measures.

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.