ICO startup escapes penalty after settling with the SEC

The Securities and Exchange Commission (SEC) has settled its charges against crypto startup Gladius for an unregistered securities offering, the agency announced Wednesday. 

As part of the deal, Gladius agreed to pay back investors who funded its $12.7 million ICO in late 2017, to register its tokens as securities. Meanwhile, the SEC explained it would not issue an extra penalty because the company, run by 20 year-old Maryland-based Max Niebylski, had self-reported its token sale and cooperated with the investigation.

The agency's cyber chief, Robert Cohen, added that he hoped the case would serve as an example and show the "benefit of...taking proactive steps" after an unregistered offering.

In a press release, the SEC called the issuance an “unregistered ICO," which Coindesk reported was out of pattern with previously settled charges against Airfox and Paragon Coin, which omitted the phrase.

“The SEC has been clear that companies must comply with the securities laws when issuing digital tokens that are securities", Cohen added, hinting the Gladius' ICO fell short of the mark.