A D.C. cryptocurrency cybersecurity company that raised almost $13 million went to the Securities and Exchange Commission and confessed that the initial coin offering was an unregistered securities offering.
Gladius Network, LLC conducted the ICO after the SEC issued its DAO Report of Investigation where it concluded that ICO’s must be registered under Section 5 of the Securities Act of 1933 (unless an exemption exists).
Due to its contrition, the SEC did not impose a penalty.
It settled with Gladius who will register the tokens and will refund money to investors who request it. (In most rescission offers, the company also has to pay interest on the returned funds).
The Commission noted: “Gladius also will file required periodic reports with the Commission. Gladius consented to the order without admitting or denying the findings.”