The Securities and Exchange Commission (SEC) charged a company, Gladius Network LLC for conducting an unregistered Initial Coin Offering (ICO), after it turned itself in.The SEC, has been on a spree, disapproving bitcoin exchange traded funds (ETFs) and the chairman of the body, Jay Clayton famously said, “Blockchain technology has incredible promise for securities and other industries. I think we all can agree on that… It greatly reduces transactions costs, including the costs of verification. It’s a powerful technology… That technology, people have used to apply to fundraising… we’ve had pretty clear…rules on how to conduct fundraising when you’re offering securities. Much of what I have seen in the ICO or token or ICO space, is a security offering… I don’t know how much more clear I can be about it.”According to the SEC’s order, Gladius conducted an ICO in late 2017, after the Commission had warned in its DAO Report of Investigation that ICOs can be securities offerings. Gladius, a Washington, DC-based company, raised approximately $12.7 million in digital assets to finance its plan to develop a network for renting spare computer bandwidth to defend against cyberattacks and enhance delivery speed. Gladius did not register its ICO under the federal securities laws, and the ICO did not qualify for an exemption from registration requirements.Gladius self-reported to the SEC’s Enforcement staff in the summer of 2018, expressed an interest in taking prompt remedial steps, and cooperated with the investigation. The SEC did not impose a penalty because the company self-reported the conduct, agreed to compensate investors, and will register the tokens as a class of securities. The case follows the Commission’s two recent ICO registration cases, in which companies agreed to pay penalties for similar registration violations and agreed to similar undertakings, a press release said.Robert A. Cohen, Chief of the SEC’s Cyber Unit said, “The SEC has been clear that companies must comply with the securities laws when issuing digital tokens that are securities. Today’s case shows the benefit of self-reporting and taking proactive steps to remediate unregistered offerings.”After the investigation, Gladius said it would file required periodic reports with the Commission. The investigation was conducted by Laura K. D’Allaird and Marc E. Johnson of the Enforcement Division’s Cyber Unit and was supervised by Mr. Cohen.Liked what you read? Join us on Telegram
© CoinJoker 2019 | All Rights Reserved.