Today, the South Carolina Securities Division filed an order to vacate the cease and desist instruction issued to blockchain logistics company, ShipChain, back in May. ShipChain was caught up in the swell of “Operation Crypto-Sweep,” a widespread effort crack down on potentially dubious ICOs. These efforts were launched by the North American Securities Administrators Association (NASAA).
ShipChain Run Aground
In the original order, U.S. regulators cited a failure to liaise with any broker, seek registration, or establish the buyers of the ICO were accredited investors before the purchase of tokens. The ruling found ShipChain falling afoul of the law on the basis they did not fulfill their obligations to be able to legally trade securities.
For its part, ShipChain came out swinging. The company rejected that their tokens could be defined as securities, it did indeed only sell tokens to accredited investors, and ultimately “…none of the purchasers of SHIPs [the business’s token] in that initial sale are South Carolina citizens or businesses,” according to a statement from the company.
Despite ShipChains defiance, their efforts did little good for their crypto’s value. When this cease and desist was first issued on May 21, ShipChain suffered a substantial drop in its market value. Going from a high of around $0.013 to a low of $0.054 in less than two days.
Since news of the annulment broke, ShipChain has recorded a respectable rise; prices have risen up to 55% and are now holding steady at $.045, at the time of writing. While this certainly signals progress in the company’s favor, it has a long way to go to reach the heights achieved prior to the cease and desist.
The rapidity at which the blockchain market is growing is nowhere near matched by the march toward sensible regulation. This disparity will likely result in continued repetition of situations similar to this. In many ways, a company’s ability to navigate these treacherous pre-regulatory waters is just as important as having a solid platform.