This week, the Securities and Exchange Commission announced that it had charged Gladius Network LLC with carrying out an unregistered initial coin offering or ICO. The company ultimately self-reported it to the SEC. The SEC’s order claims that Gladius conducted the ICO in late 2017 after the Commission warned in the DAO Report of Investigation that ICOs could be classified as securities offerings.
Gladius is based out of Washington, DC. The company raised roughly $12.7 million in digital assets to finance its plan to develop a network for renting computer bandwidth which would ultimately be used to defend against cyberattacks and increase delivery speeds. The company did not register the ICO under federal securities laws and it did not qualify for an exemption.
Gladius self-reported to the SEC’s Enforcement staff in the summer of 2018. It cooperated with the investigation. Therefore, the SEC did not take the action of imposing a penalty. Under the order agreement, Gladius will return funds to investors who bought tokens in the ICO and want a refund. The company will also register the tokens as securities pursuant to the Securities Exchange Act of 1934.
Further details have been made available here.