February 21, 2019 12:14 AM
After the company self-reported its unregistered securities offering, it walked away without paying a fine.
The Securities and Exchange Commission () today issued a announcing it has instituted against Gladius Network LLC, basically thwarting the unregistered initial coin offering (ICO) that the startup launched in 2017. The big deal is that Gladius got off without having to pay a penalty. So, it’s a truce, of sorts.
Since the time Gladius rolled out its growth plan, the -enabled cybersecurity services company generated nearly $13 million. for renting spare computer bandwidth. The firm also intended to incorporate transaction processing that is comparatively fast and affordable.
Gladius had agreed in advance of today’s announcement that it would submit a settlement offer – it had turned itself in to the in mid-2018. Surely, the growing sound of alarms over ICO fraud, theft, and (occasionally) ineptitude served as a motivating backdrop.
Gladius got out of the doghouse penalty-free because it “self-reported” and agreed to give investors their money back. Gladius also agreed to register with the as well as register the digital it had created for , now officially deemed “securities” as defined by the . These actions are relatively new, and we can bet they won’t be the last.
It was only last November that the issued a and explained its dealings in , in which Airfox and Paragon Coin agreed to pay penalties for similar registration violations, refund investors, and make other amends.
In the November press release, Stephanie Avakian, co-director of the ‘s Enforcement Division, stated:
“We have made it clear that companies that issue securities through ICOs are required to comply with existing statutes and rules governing the registration of securities. These cases tell those who are considering taking similar actions that we continue to be on the lookout for violations of the federal securities laws with respect to digital assets.”
The takeaway for ICOs: It might be better to get on the right side of the instead of taking a wait-and-see approach.
Mary Driscoll covers finance and business trends as a staff writer for ETHNews. She formerly served as an editor for management and finance at the Economist Intelligence Unit and a research principal at APQC. In addition, she has written for The Wall Street Journal CFO Report, HBR-online, and strategy + business. Her book on corporate treasury management was published by John Wiley & Sons, Inc. Mary enjoys hiking and skiing in the Sierras with family. Her goal in life is to win big on Jeopardy.
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Published at Thu, 21 Feb 2019 15:08:34 +0000
