Gladius Startup Admitted To SEC Holding Unregistered ICO
A technological startup Gladius Network voluntarily confessed to the US Securities and Exchange Commission (SEC) the sale of unregistered assets. After that, the American regulator pressed charges against the project and demanded to settle the situation under the law, as reported on the agency’s website.
The Gladius startup held an ICO at the end of 2017, collecting more than $12 million in cryptocurrency. The funds were supposed to be spent on a network for renting throughput, which would protect devices from cyber attacks. However, the Gladius tokens were not registered as securities, although at that time the regulator had already issued the corresponding requirement.
The agency insists that ICOs should be registered under the securities law or at least agreed on the exemption from such a procedure. Gladius did not apply for the latter option as well.
Since the firm itself admitted to the offense, cooperated with the regulator, and agreed to take measures to remedy the situation, the SEC decided not to charge it with a fine. Gladius promised to return the money to investors and register its digital coins eventually. Moreover, the startup should submit periodic reports to the agency.
Robert Cohen, the head of the SEC cybersecurity department, stated that issuing companies must follow the US Securities Act because tokens are securities. He also stressed that the conscious approach of Gladius to the situation turned to it as a benefit.
Earlier, the SEC caught two more startups on unregistered ICOs — Airfox and Paragon. The Commission also obliged them to return the money to investors and register their assets, but the projects still had to pay a $250,000 fine.
Previously, the SEC advised Reality Shares to withdraw the application for bitcoin-ETF.