Author: Gan Jia Ci
The South Carolina Attorney General’s Office issued ShipChain a cease-and-desist order for violating the securities statutes on 21 May.
The blockchain startup was allegedly offering “investment opportunities in the ShipChain platform and the corresponding tokens to South Carolina residents through its website and in-person events held in South Carolina” without being registered with the Securities Division as a broker-dealer and there were no claims by ShipChain to be exempted from registration.
“At no time relevant to the events stated herein were the securities at issue registered with the Division or federal covered securities, and no exemption from registration has been claimed by the Respondent.”
According to the order issued, “It is unlawful for a person to offer or sell a security in this State unless that security is a federal covered security, exempt from registration, or registered.”
Hence, ShipChain is prohibited from performing business in South Carolina in violation of the Act and is “permanently barred from participating in any aspect of the securities industry in or from the State of South Carolina.”
In addition, any exemption from registration with the Securities Division that ShipChain has claimed will be “permanently revoked”.
ShipChain is a platform that runs on the Ethereum blockchain to manage shipment tracking with a “sidechain to track individual encrypted geographic waypoints across each smart contract”.
ShipChain reserves the right to request for a hearing on the matters within 30 days from the issuance.