Gladius Fails to Pay SEC Fines

The blockchain-based cybersecurity firm, Gladius announced that the company dissolved this week. Unfortunately for Gladius token holders, the company chose to ignore the $12.7 million settlement payment the SEC imposed earlier in the year. Now, Gladius token holders are left holding the bag.

In what seems to be a growing trend, another SEC charged ICO dissolved before repaying investors.  In this instance, Gladius received $12.7 in fines after self-reporting to the SEC in February. Understandably, the SEC showed some leniency towards the firm for their decision to self-report.

A Lenient Approach

As part of the SEC settlement, regulators didn't impose any additional penalties on the firm. However, they did make the company executives agree to compensate investors fully. Also, the company was to register the tokens as securities. Gladius agreed to the terms but asked for multiple extensions on the repayment date. Rather than repaying investors, the company chose to dissolve.

Gladius Founder Max Niebylski

News of the Dissolution

Investors first received the bad news via a November 22 telegram post. In the post, the company's co-founder and chief technology officer, Alex Godwin described the decision. He explained that  the firm “ceased operations effective immediately.” He also stated that the firm “no longer has funds to continue operations.”

Rektiers

As you could imagine, investors are furious over the turn of events. Investors feel as if the SEC's approach lacked enforcement. Investors have even formed a Telegram chat group called the Gladius Rektiers to organize another strategy to reclaim lost funds.

Gladius

Gladius entered the market in April 2017. The firm planned to utilize a combination of blockchain-based technologies to protect users. Specifically, the firm employed decentralized CDN and DDoS protection on the Ethereum Blockchain. Additionally, Gladius platform users could rent out unused bandwidth and computational power.

Gladius Website

Interestingly, Gladius executives did decide to leave their open-source code available on GitHub. The team even welcomed developers to further their protocol on their now deceased website's homepage.

Dipping on the Bill

While the Gladius dissolution is bad news, it joins a host of other SEC charged ICOs who skipped out on their deadlines. For example, AirFox missed an October deadline this year. Airfox entered the market as a mobile banking solution before the SEC charged the firm with selling unregistered securities.

Additionally, Paragon Coin missed its investor repayment deadline. As part of Paragon Coin's SEC settlement, the company agreed to offer to repay investors and pay $250,000 in fines.  For their cooperation, the SEC withheld fraud charges. Also, the company agreed to register their tokens as securities and adhere to all relevant regulations moving forward.

The Paragon Coin saga received premier coverage as it involved a well-known beauty pageant winner and the rapper – The Game. Currently, the Paragon Coin website tells investors that want a refund to submit before November. Notably, their SEC repayment settlement date already pasted back in July.

The Gladius Saga Continues

The decision to dissolve prior to adhering to the SEC's demands could prove to be a costly one for Gladius. For now, investors are culminating their outrage to organize their next maneuver. Many expect to see additional charges in some shape or form against the company's owners as regulators decide how to handle the news and investor outcry.