Gladius Network raised $12.7 million in an initial coin offering (ICO) during November 2017. The idea behind Gladius Network was that it would prevent Denial of Service (DoS) attacks. Of course, there are already platforms that protect against DoS attacks, but investors bought into it since any ICO idea could easily raise money in late 2017.

However, the ICO was illegal due to Securities and Exchange Commission (SEC) regulations, and Gladius Network self-reported to the SEC to receive a more lenient punishment. The punishment was still pretty drastic, however, with the SEC telling Gladius Network, that the $12.7 million had to be fully refunded to investors.

Gladius Network asked for multiple deadline extensions in order to have time to do a refund, and these requests were granted, but ultimately closed down the whole project this past week and missed the deadline.

The announcement on the Gladius Network website says “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.”

It is perhaps a bit shocking that Gladius Network claims to have run out of funds while simultaneously not paying back any investors, let alone the full amount which was promised. There is speculation that the decline in Ethereum’s (ETH) price since late 2017 partially caused this outcome, as well as improper spending of funds, which was a common occurrence among ICOs. Cryptocurrency prices were rising so fast in late 2017 that ICO companies believed they could spend what they wanted and would simply gain it back from HODLING coins.

In any case, based on past ICO debacles it is likely that investors have little recourse. It remains to be seen what the SEC will do to Gladius Network now that the deadline has expired.