Gladius ICO Pulls Exit Scam, Ignores SEC’s Directive
Investors’ outcry against Gladius blockchain firm, which aborted its project without repaying the $12 million amassed through ICO. Since 2017, none of the ICOs have fared well.
Gladius saga had turned out to be extremely stressful for investors, after impressing with a unique project involving the creation of a decentralized DDoS protection ecosystem that can also function as a CDN, where community members can offer their unused bandwidth to get GLA tokens as rewards.
The sky high promises never turned into a reality with project owners Max Niebylski, Alex Godwin, and Marcelo McAndrews voluntarily offered themselves for scrutiny earlier this year after the market watchdog came hard on the unlawful offering of securities via ICOs.
Initially, it looked as if the venture would pay back the raised money as instructed by the US SEC, but the founders were postponing and dragging time, with the final deadline lapsed on November 18, 2019.
Currently, it seems that the founders have submitted request for winding down the company, while deserting the project on claims that they are in shortage of funds.
Alex Godwin, co-founder of Gladius, issued the following message via Telegram:
To the Gladius Community,
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. Our code will remain available on GitHub for the next three months. We still believe in the power of our technology, and if anyone in the community is interested in pursuing it we welcome it.
— The Gladius Team
The Telegram message does not speak about refunding the money collected from investors. Considering the firm’s self-declaration about lack of funds, it is certain that refund is impossible. The query raised my some investors is whether the founders have siphoned away funds for their personal use.
Without disclosing their identity, several investors in Gladius project expressed their disappointment. One of the Gladius community members said as follows:
“I invested in Gladius because I liked the idea of the project. But after 1.5 years since the ICO they have not delivered a working product… check the messages from Gladius admins [they keep delaying deadlines].”
Likewise, a community member pointed out that the Gladius team advocated the ICO on all social media platforms but chickened out after getting funded.
“The team promoted the ICO by Facebook ads and ads on crypto websites to get investors. After ICO they said they don’t care about investors and said they don’t control market!…Gladius is a high-level scam. The team always gives excuses but never did anything well.”
Some of the Gladius community members also complained about the lack of proper communication:
“This entire thing has been very poorly managed, and the silence is very unfair. Completely cutting off any communication or updating the community in any way gives us only one thing to think and that is they never plan to actually refund people and will fade away quietly…”
Some of the disappointed community members are looking at the possibility of legal action against the firm and promoters:
“Sueing is definitely an option, because I feel the team didn’t dissolve the company without a good payment from the company to themselves.”
Many of them don’t know what to do with the worthless GLA tokens held by them. Even if some other team restarts working on the Gladius code, the issued GLA tokens may not be accepted.
Finally, it is almost certain that Gladius founders have fooled investors’ right from the beginning. They have spent $12 million without showing any proof of development, while leaving investors with worthless tokens.
Investors and accounting experts will also be interested in looking at the Gladius’ financial transactions in the months leading to shut down. Specifically, any token sale by founders or self-rewards will be closely looked at.
The SEC’s order is yet to be clarified by Gladius. In the meantime, investors hope that the regulator will take notice of the unfolding exit scam.