ShipChain, Inc. has been cooperating with an inquiry by the staff of the United States Securities and Exchange Commission. As a result of that inquiry, the staff has concluded that the SHIP tokens are securities as defined under the Securities Act of 1933 and that the sale of tokens at the end of 2017 required registration with the SEC. ShipChain, Inc. has made an offer of settlement that neither admits nor denies those conclusions. In the offer of settlement, ShipChain, Inc. offered, among other things, its payment to the SEC of $2,050,000 for creation of a “Fair Fund” pursuant to Section 308(a) of the Sarbanes Oxley Act of 2002, and its allowance of the disabling of SHIP tokens held by it or by its founders. The Commission has accepted that offer of settlement and has now issued its Order that finds that SHIP tokens are securities and that the sale should have been registered, and ordering that payment and the disabling of those SHIP tokens. A copy of that Order may be seen HERE. The SEC will later appoint a Fund Administrator to develop and oversee a plan of distribution for the Fair Fund.

In accordance with the Order, ShipChain is sending requests to digital asset trading platforms that it knows offer trading of SHIP tokens, requesting the removal of SHIP tokens from those platforms. Unfortunately, ShipChain, Inc. is now without sufficient resources to continue its business. Consequently, ShipChain, Inc. has made the difficult decision to cease operations and is now in the process of closing its affairs.

ShipChain, Inc. appreciates the support of those interested in a transformative, blockchain-based innovation in the global transportation industry and regrets that, despite the significant strides that it was able to make toward that goal, it will not be the one to lead that transformation. The substantial work that we have done, however, is open-source and so can, we expect, help accelerate that innovation pathway.