The US Securities and Exchange Commission (SEC) has issued a Cease and Desist Order to ShipChain on the initial offering of the company’s SHIP tokens. According to the SEC, the tokens were unregistered securities.
ShipChain secured about $27 million in its ICO as the company provides swift transportation within the shipping industry. Specifically, the filing stated that the shipping and logistics firm raised $27.6 million through the sales of over 145 million SHIP tokens. The ICO occurred between late 2017 and early 2018, the filing added.
Apart from being an enhanced transportation provider, the company also tends to increase transparency, leveraging an undeveloped blockchain platform.
InsideBitcoins noted in a report that ShipChain violated some US securities regulations. In the report, InsideBitcoin revealed that users of ShipChain could only access the blockchain platform by buying SHIP tokens. Also, the firm paid promoters of the offering with SHIP tokens.
Now, ShipChain will transfer all its SHIP tokens to an SEC employee and also pay a $2,050,000 fine. The SEC filing revealed further that ShipChain “has decided to ease all operations and the penalty represents substantially all of ShipChain’s net assets.”
Before now, ShipChain was able to escape a Cease and Desist Order from the SEC back in May 2018. Unlike then, the fine may be facing severe consequences for its recent action.
At press time, ShipChain is down 5.24% to $0.001100.
Image Credits: Pixabay
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