South Carolina Issues Cease-And-Desist Order to ShipChain
South Carolina issues a cease and desist order to ShipChain which is a blockchain startup on May 21. The South Carolina Attorney General’s Office issued this order on account of ShipChain violating the state’s security statutes.
As per the official notice, ShipChain constantly offered investment chances to the inhabitants of South Carolina on its platform. To do this, the company used its corresponding token, both in-person events in South Carolina and on its website. ShipChain was supposedly unregistered with the Securities Division of the Office of the Attorney General of the State of South Carolina as a broker-dealer.
The order reported:
“At no time relevant to the events stated herein was Respondent ShipChain registered with the Division as a broker-dealer, and no exemption from registration has been claimed by Respondent ShipChain… 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.”
ShipChain is an Ethereum-based platform, which offers the service of tracking shipment. The company permits it’s to pay using two ways. They can either pay directly in tokens they have or buy tokens from the South Carolinian startup for booking cargo.
The order asked the blockchain startup to stop “transacting business” in the state. Furthermore, ShipChain is “permanently barred from participating in any aspect of the securities industry in or from the State of South Carolina”. The startup has a total of thirty days to ask for a hearing on the issue.
Earlier this month, the Texas State Security Board issued a cease-and-desist order to a Bitcoin (BTC) investment company. The company was offering unregistered securities and misleading their investors. The order reported that they were encouraging various BTC investment programs guaranteeing “100% profits in 21 days” without any risk
Consequently, US and Canadian state and provincial security regulators have started many examinations about suspicious crypto business. Security controllers apparently cautioned 35 organizations about infringement of state security laws with a few cases resulting in cease-and-desist actions.