In a significant triumph for the ShipChain supply chain blockchain project, authorities in South Carolina have on July 26, 2018, vacated the cease-and-desist order hammered on the project earlier in May 2018. The South Carolina Securities Commissioner had no choice but to lift the ban after results of its investigations showed that the ShipChain DLT project and its founders are not guilty of any offense against the state.
A Legit Blockchain Project
In a first of its kind occurrence in the US state of South Carolina, the South Carolina Securities Commissioner, in the South Carolina Attorney General’s office have vacated the cease-and-desist order filed against ShipChain earlier in May this year.
On May 25, 2018, BTCManager informed that a notice had been sent to ShipChain blockchain-based supply chain project and its founders, alleging that ShipChain was operating illegally in the state, selling unregistered securities to South Carolina residents.
“At all times relevant to this order, Respondent ShipChain continuously offered investment opportunities in the ShipChain platform and the corresponding tokens to South Carolina residents,” an excerpt from the order read at the time, adding “At no time relevant to the events were the securities at issue registered with the division or federal covered securities, and the respondents have claimed no exemption from registration.”
As always, ShipChain was given 30 days to respond to request a hearing.
The Push Back
In response to the cease order, the ShipChain team sent a letter to the South Carolina Securities Commissioner’s office on May 24, 2018, stating categorically that it does not “believe that its [SHIP] tokens are securities.”
The team argued that their token sale event was conducted in compliance with all necessary laws and concluded in January even before “locating” its software development team in South Carolina.
The project founders also made it clear in the letter that its SHIP tokens were sold to accredited investors and none of the investors that participated in its token generation event are Carolina citizens or businesses.
After carefully investigating the matter, the Securities Commissioner of South Carolina have deemed it necessary to vacate the order as ShipChain, and its founders have been found to commit no wrongdoing.
“Now, therefore, it is at this moment ordered that the Administrative Order to Cease issued to ShipChain, Inc. on May 21, 2018, is at this moment vacated” an excerpt of the order read.