ICO startup Gladius voluntarily reported to SEC on violation of securities legislation
The US Securities and Exchange Commission (SEC) has indicted crypto startup Gladius Network LLC for distributing unregistered securities through initial coin offering (ICO).
“Gladius held its ICO at the end of 2017, after the Commission issued a warning regarding the investigation of The DAO, which indicated that ICOs could qualify as securities offers,” the regulator said in a press release. – Gladius has not registered the ICO in accordance with federal securities laws; his ICO also did not fall under the exemption from registration requirements “.
Gladius raised about $ 12.7 million to develop a network to rent unoccupied computing power to defend against cyber attacks and improve connection speeds. In the summer of 2018, the startup itself turned to the SEC, expressing a desire to correct the violations committed, and contributed to the investigation.
The SEC took this fact into account and decided not to sanction Gladius after it agreed to return the money to investors and register its token as a security..
“The SEC has made it clear that companies must comply with securities laws when issuing digital assets that are securities,” said SEC Cyber Chief Robert Cohen. – Today’s case demonstrates the advantages of self-disclosure of information about violations and active actions aimed at eliminating the consequences of an unregistered offer of securities “.
Among other things, Gladius will submit periodic reports to the SEC. The startup agreed to comply with the requirements of the regulator, not admitting, but also not refuting the arguments of the prosecution.
In November last year, under pressure from the SEC, ICO projects Airfox and Paragon registered their tokens as securities.
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