Blockchain startup ShipChain has been hit with a restraining request from the South Carolina Attorney General’s Office, which guaranteed the company infringed the state’s securities statutes.
The state’s Securities Commissioner said in a request issued on Monday that ShipChain offered what adds up to an investment decrease by a method for its token, which is “the main medium of trade on the platform.”
The request expressed: “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 through its website and in-person, events held in South Carolina. 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.”
ShipChain charges itself as an ethereum-based platform for tracking the shipment of merchandise. It’s also a member of the Blockchain in Transport Alliance, which considers significant firms such as FedEx and JD.com among its statuses.
The request – if concluded – would banish ShipChain from “executing business” and “from taking an interest in any part of the securities’ business in or from the State of South Carolina.” The startup has 30 days to ask for a hearing on the issue, where it might contend that its token deals don’t qualify as an unregistered securities advertising.
A request for comment was not quickly returned by ShipChain. However, the startup recognized the request on Twitter and said it was chipping away at a formal reaction. Saying: “We are aware of the letter that was sent to us by the Attorney General of South Carolina. Rest assured that our lawyers are working on responding as fast as they can. We will keep you updated as soon as we have more information”.
ShipChain’s trading on the open market token saw a lofty drop in an incentive on Tuesday, and as of press time is exchanging at $0.065 – down 39 percent contrasted with yesterday – as indicated by information from CoinMarketCap.