Gladius ICO: Multi-Million Scam, SEC Ruling Ignored

Published on [Date not provided] by Cryptovest Staff

Gladius admits sending $1M to a known cybercriminal

Gladius ICO has repeatedly failed to honor investor agreements and has cut off communication, even within their community, prompting many to term it a scam.

Initial coin offerings, or ICOs, managed to raise billions over the last two years, at least until regulators caught on and sent notices to several projects, especially those selling tokens very similar to securities.

However, not all projects during the ICO mania managed to deliver on their promises and most investors had their fingers burnt to the tune of millions of dollars.

This story is about one such case, where we received numerous reports from several sources, alleging that a fairly successful ICO from 2017, has repeatedly refused to honor private investment agreements and owes one particular venture capital fund over $8 million after reneging on an agreement for over a year.

The ICO, in this case, is Gladius, which managed to raise over $12M 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.

The story

Max Niebylski, Alex Godwin, and Marcelo McAndrews are the project’s three co-founders, and in early November, they were looking for private investors for Gladius, which is when they connected with Krypton Blockchain, a crypto-centric venture capital fund.

As per our sources, after negotiations, an agreement was penned between Gladius and Krypton Blockchain, according to which Krypton was to invest a sum of $600,000 in the ICO, in exchange for 15% equity, GLA tokens with an 80% bonus (valued at $1,080,000) and other obligations. This agreement was duly signed by Gladius founder and CEO Max Niebylski and Krypton Blockchain’s authorized lawyer (Cryptovest has a verified copy of this agreement).

Following this, Krypton Blockchain made the $600,000 investment via Bitcoin in late November (as agreed). These transactions are verified on the blockchain, and Cryptovest has received evidence to the same effect (screenshots below).

After having received the funds, the Gladius team openly promoted their deal with Krypton Blockchain (screenshots below show promotions were done by all the co-founders - Max Niebylski, Alex Godwin, and Marcelo McAndrews).

Krypton also did its part by promoting the project in its media channels and networks. However, despite these promotions and successful fundraising, Gladius never honored its part of the agreement and did not send even a single token to Krypton Blockchain.

Gladius admits sending $1M to a known cybercriminal

One of the reasons provided by Gladius for not honoring their agreement was loss of liquidity, resulting from the crypto crash of 2018.

Moreover, they also admitted to having sent $1M to a known cybercriminal, Gery Shalon, but withheld this fact from their investors.

Whether they intended to scam their investors by cooperating with criminals or not is a question which remains unanswered.

SEC has asked Gladius to return funds to investors

Earlier this year Gladius ICO self-reported itself to the U.S. Securities and Exchange Commission and agreed to return funds to all investors. However, even after over a year since the initial agreement, Krypton Blockchain has not received any funds back from Gladius, and their team is seemingly hiding behind their lawyers.

The same case holds true for community members who invested in Gladius during the ICO, as they are left in the dark about their refunds.

The evidence speaks volumes - is Gladius a scam?

The documents and records Cryptovest has received from sources indicate that Gladius did indeed enter into a private investment agreement with Krypton Blockchain, and has, since then, refused to honor the terms.

Meanwhile, Gladius team members, including Max Niebylski and Alex Godwin, have refused to give any comments and asked us to contact their lawyers, which is further proof that they are not willing to communicate in this regard, and believe they will be able to get away with this in the absence of clear regulations.

Are they trying to scam investors? It certainly seems so, and their repeated elusiveness, despite the SEC ruling, doesn’t make things any better. So far, it seems that Gladius can be a cautionary tale for private investors looking to put money into ICOs.

In this case, everything was done by the book - the agreements were handled by lawyers, and the investment was made promptly. However, the team stood to profit immensely from the January crypto market surge, while Krypton Blockchain and other investors not only lost out on Bitcoin profits, they also lost out on their GLA tokens, which have currently lost over 80% of their value.

Community Speaks

Community Member 1: “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].”

Community Member 2: “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.”

Community Member 3: “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…”