ShipChain to Settle with the SEC Following $27.5 Million ICO of SHIP Tokens

The Securities and Exchange Commission (SEC) has accepted an offer to settle from ShipChain, a company that apparently raised $27.5 million in an initial coin offering (ICO) for SHIP tokens.

The SEC states that ShipChain is a private company that was engaged in developing a fully-automated, transparent, shipping and logistics tracking and management platform using the Ethereum blockchain technology.

Between November 2017 and the beginning of January 2018, ShipChain promoted its company and the SHIP Token ICO. According to the filing by the SEC, ShipChain’s offering of SHIP Tokens was not registered with the Commission, nor did ShipChain’s offer and sale of SHIP tokens satisfy any valid exemption from registration. In total, ShipChain sold approximately 145 million SHIP tokens to over 200 people or groups of people.

Upon learning of a pending action by the SEC, ShipChain submitted an offer to settle which the SEC has decided to accept.

The SEC states that ShipChain has agreed to:

  • Transfer all SHIP tokens in its possession or control, including within the control of the company’s directors, to the Fund Administrator within 10 days of receiving notice of the Fund Administrator’s appointment, to enable the Fund Administrator to permanently disable such SHIP tokens.
  • Publish notice of the Order on ShipChain’s website and social media channels, in a form not unacceptable to Commission staff, within 10 days of the date of this Order.
  • Take reasonable steps to convey this Order to digital asset trading platforms that, to its knowledge, offer trading of SHIP tokens and request the removal of SHIP tokens from the platforms, and publish notice of such requests on ShipChain’s website and social media channels, in a form not unacceptable to Commission staff, within 10 days of the date of this Order.

The SEC added that it considered ShipChain’s financial situation and that the company has decided to cease all operations. ShipChain is also expected to pay a penalty of $2.05 million which is said to be substantially all of its assets.

 

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