South Carolina Drops Cease And Desist Orders Against Two Blockchain Startups

Blockchain, News, Regulation | July 27, 2018 By:

The South Carolina Attorney General’s Office has dropped cease and desist orders against two blockchain startups.

In May of this year, the South Carolina Securities Commissioner served ShipChain, a blockchain solution provider for the transport and logistics industry, a cease and desist order for allegedly violating the state’s securities statutes. At the time, the regulator said the firm was not registered with the Securities Division as a broker-dealer and were not allowed to offer investment opportunities in their tokens to South Carolina residents. ShipChain reportedly raised $30 million in a private token sale in January.

Following the order in May, ShipChain responded publicly, stating that they did “not believe its tokens are securities.” ShipChain also said that the firm was “not aware” that SHIP tokens were even offered to South Carolina residents, since the token sale was held prior to the company’s placement in the state.

On Thursday, the South Carolina Attorney General’s office filed an order to vacate the previous cease and desist order. Deputy securities commissioner Tracy Meyers said that after receiving more detailed information about ShipChain, the commission determined there was good cause to vacate the order.

The second firm, crypto cloud mining platform Genesis Mining, received a cease and desist order in March for allegedly offering South Carolina residents with unregistered mining contracts, which were deemed securities by the regulator primarily because of the expectation of profits. Genesis Mining is now ordered to be dismissed as a respondent from the cease and desist order. The administrative order, however, remains in effect to all remaining respondents, including Swiss Gold Global, which was charged with acting as an unregistered broker-dealer for Genesis Mining.