Gladius Network launched an ICO in 2017 and raised $12.7 million in a public token sale, during which it promised investors that it would offer blockchain cybersecurity services to companies.
However, like most crypto projects, the United States Securities and Exchange Commission (SEC) in February handed a cease-and-desist order to the Nevada-based company under allegations that the token sale violated securities law.
While the SEC said then that Gladius took “significant steps” to remediate its violation of securities law, the regulator also added that the company voluntarily agreed to pay back investors.
Whether that payment, however, will be made is now an issue of contention according to a Monday report by Yahoo Finance.
Per the report, the Gladius team has told investors that they’ve run out of funds and are in the middle of dissolving the company.
Gladius team member Alex Godwin broke the news to the project’s Telegram channel, which as for a significant period, represented their primary means of one-sidedly communicating with invested.
He reportedly wrote:
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.
Evidently, the news means that Gladius no longer has the financial capacity to meet its earlier promise to the U.S SEC, that it would pay back investors.
At the time of writing, the regulator has not issued any statement on the development, although investors who participated in the ICO has launched a new Telegram channel (Gladius Rektiers) intending to pursue legal action against the company.