Blockchain startup ShipChain has been hit with a cease-and-desist order from the South Carolina Attorney General's Office, which claimed the company violated the state's securities statutes.
The order stated:
ShipChain bills itself as an ethereum-based platform for tracking the shipment of goods. It's also a member of the Blockchain in Transport Alliance, which counts major firms such as FedEx and JD.com among its ranks.
The order – if finalized – would bar ShipChain from "transacting business" and "from participating in any aspect of the securities industry in or from the State of South Carolina." The startup has 30 days to request a hearing on the matter, where it may argue that its token sales do not qualify as an unregistered securities offering.
A request for comment was not immediately returned by ShipChain. However, the startup acknowledged the order on Twitter and said it was working on a formal response.
ShipChain's publicly traded token saw a steep drop in value on Tuesday, and as of press time is trading at $0.065 – down 39 percent compared to yesterday – according to data from CoinMarketCap.
Shipyard image via Shutterstock
DISCLOSURE
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.