Distributed cybersecurity startup Gladius dissolved without complying with the United States Securities and Exchange Commission (SEC) to reimburse investors.

The firm’s co-founder and chief technology officer Alex Godwin announced the dissolution of the company in a message sent to the project’s official Telegram group on Nov. 22.

“The company no longer has funds to continue”

The message — collectively signed by the Gladius team — reads:

“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.”

The message also promises that the codebase maintained by the company will remain online for three months for anyone to use.

Sale of unregistered securities

Gladius was charged for selling unregistered securities by the SEC in February after self-reporting to the regulator.

The company raised about $12.7 million in cryptocurrency during its token sale in late 2017. The SEC noted that it took a particularly lenient approach towards the company since it self-reported:

“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.”

As Cointelegraph reported earlier this month, Gladius is just one of several firms that missed their deadlines to repay investors following charges by the SEC.

Criticizing the lenient approach by the SEC, Gladius (GLA) token holders have created a Telegram chat group, dubbed Gladius Rektiers, to discuss the next course of action.

Reddit user Bitttburger wrote: