Gladius ICO Finally Exit Scams After Burning Millions, Leaving Investors High and Dry
Gladius ICO shuts down as founders say they've burned all $12 million - investors call scam.
While ICOs from 2017 have mostly turned out to be disappointments, one of the most painful cases is that of Gladius, which started off strong, raising over $12 million in its token sale, pitching a decentralized DDoS protection network which can also serve as a CDN, where users can lend their spare bandwidth to earn GLA tokens.
However, not only did the project fail to deliver, the founders, Max Niebylski, Alex Godwin, and Marcelo McAndrews self-reported themselves to the U.S. Securities and Exchange Commission earlier this year, when the regulatory body started cracking down on the illegal sale of securities via ICOs.
It appeared that the project would return funds to investors, as directed by the U.S. SEC, but the founders kept delaying and getting extensions, the last of which was set to expire on November 18, 2019.
Now, it appears the founders have filed for dissolution and abandoned the project claiming that they’ve run of out funds.
Today, co-founder Alex Godwin posted on Gladius’ 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
There is no mention of refunding investors in this message, and it appears that it will not be happening since the company is claiming to have run out of funds. Have the founders pocketed whatever was left from the massive $12 million raise after years of delaying tactics?
Earlier, we reported on the Gladius ICO scam, citing sources including both private and retail investors.
Several Gladius community members spoke with us on the condition of anonymity (they did not want to jeopardize any chance at getting a refund) and had the following to say:
“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].”
Similarly, a community member highlighted how the team promoted the ICO everywhere but abandoned investors after funds were raised:
“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.”
Another community member criticized the Gladius team’s handling of 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…”
Now, the community is understandably disappointed while some are considering legal options, as one member wrote:
“Sueing is definitely an option, because I feel the team didn’t dissolve the company without a good payment from the company to themselves.”
Others are contemplating what to do with their now worthless GLA tokens since even if another team picks up the Gladius code, they won’t continue with the previous tokens.
Ultimately, Gladius founders appear to have misled investors from the start, including Krypton Blockchain and are also believed to have dealt with cybercriminals. They have burned through $12 million in funding, and have almost nothing to show for it, while investors are left holding worthless tokens.
It would be interesting to discover the company’s financial dealings in the months leading to this dissolution, particularly any sale of tokens from the founders as well as payments to themselves.
There also needs to be more clarity in terms of the SEC-ordered refunds, and we ask Gladius founders to provide details on the matter. Meanwhile, the investors will continue to hope the case does not die here and the SEC takes notice.
If you’re an investor burned by Gladius ICO, please contact us to share your story and get support.
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