Abandon ShipChain! Logistics startup torpedoed by SEC for more than $ 27 million unregistered ICO
The start of the ShipChain supply chain is catching on quickly.
The United States Securities and Exchange Commission ordered ShipChain will go out of business on Monday and pay a fine of $ 2.05 million for violating securities laws in 2017. ShipChain, which raised $ 27.6 million through its initial coin offering (ICO) SHIP, accepted the penalty and quickly settled the lawsuit.
“The penalty represents almost all of ShipChain’s net assets,” according to the order. ShipChain further opted to “cease all operations,” the order says.
The development marks the end of a symbolic project that has long crossed rough seas.
ShipChain had sought to create an automated ledger for international trade at the top of the Ethereum blockchain. It sold 145 million SHIP tokens to more than 200 investors from late 2017 to early 2018. An early project whitepaper explained that the product would fuel research, development, marketing, law – in essence, all operations.
This has drawn the ire of US securities regulators. Shortly after the ICO closed, South Carolina State Securities Regulators ordered ShipChain will cease operations. He alleged that SHIP was unregistered security in violation of state law. But ShipChain fought back. South Carolina finally released the business and the project have sailed.
SEC action rekindles these accusations and closes them quickly. Buyers of SHIP could reasonably expect a return on their investment from ShipChain’s business efforts, the SEC argued. This is called an investment contract – a security. Companies must register offerings of securities with the SEC.
ShipChain never did. It now joins the graveyard containing the wreckage of other ICO projects sunk by President Jay Clayton’s SEC.