Yesterday, we reported about the ShipChain ICO being hit with a cease and desist from the state of South Carolina. The initial coin offering model has been getting a great deal of heat lately from industry watchdogs and regulators. They are getting more involved due to the increasing interest and insane amounts of money being raised by tokens that might not even have a working project yet.
You can go here to read the news that broke yesterday – but today ShipChain's team released an official announcement.
On Tuesday, May 22, ShipChain received, without any prior notice or inquiry, an administrative order from the South Carolina Securities Commissioner. The order claims that “evidence exists to support” accusations that ShipChain has been and is improperly offering securities in South Carolina, and requires that it stop. The order does not state what the evidence is or who made the accusations.
The order refers to ShipChain’s issuance of its “SHIP” tokens. SHIPs are blockchain tokens that are one means of enabling transactions on ShipChain’s award-winning, innovative logistics platform. ShipChain does not believe that the tokens are securities. In addition, if the Commissioner’s investigation, referred to in the order, had ever contacted ShipChain, ShipChain would have shown that its private sale of tokens was conducted in a manner consistent with applicable securities laws requirements; that it was concluded in January, before ShipChain located its software development team in South Carolina; that since January, ShipChain has not been offering, issuing, or selling tokens, and already had no plans to do so again for the foreseeable future; that all offers of the tokens in that initial sale were made to institutions and persons who qualify as accredited investors; that none of the purchasers of SHIPs in that initial sale are South Carolina citizens or businesses; and that ShipChain is not aware that SHIPs were even offered in South Carolina or to any South Carolinian during the private sale. The order’s misunderstanding of the function of SHIPs in a platform that has excited major, sophisticated industry players as well as its confusion of ShipChain’s informational events which are held to educate the public about the platform is especially dismaying and could have been readily clarified had ShipChain been given the opportunity.
ShipChain’s founder and CEO is an alumnus of Clemson University who has now returned to make his home in the Upstate. He and the young company are excited to build a globally-impactful business in the Palmetto State, bringing high-tech employment in logistics to Greenville. It is regrettable that they were not given the opportunity to respond before these erroneous accusations were aired. Now that they have belatedly been made aware of the South Carolina Securities Commissioner’s questions, they look forward to alleviating his concerns and clearing the record. In the meantime, their plans not to issue, offer, or sell any more tokens in the near future remain in place and as they were, in satisfaction of the order; and they are continuing to grow their already-talented software development and company management teams in South Carolina, to roll out their platform and enhance its robustness, and to expand their partnerships with businesses who are among the largest and most sophisticated participants in the worldwide logistics field.
What do you guys think of the official statement that ShipChain released? There are a lot of headlines popping up lately regarding is cryptocurrency a security? We recently covered how the Pentagon has concerns and just today the DOJ launched a criminal probe into the entire bitcoin price manipulation possibility.