Operation Crypto-Sweep: Ethereum Token ShipChain Ordered Cease and Desist

The South Carolina Attorney General's Office has just hit the blockchain startup ShipChain, with a cease-and-desist order.

ShipChain is a freight logistics platform built on the Ethereum blockchain.

The securities commissioner claims the company violated the state's securities laws.

"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 has been offering "Investment opportunities" to residents of South Carolina at live events and online.

The startup has 30 days to request a hearing to dispute that its token sales do not qualify as an unregulated securities offering.

ShipChain addressed the matter via their company Twitter channel two days ago.

ShipChain has concluded its ICO and is already trading on exchanges, specifically Gate.io and HitBTC.Operation "Crypto-Sweep".

ShipChain isn't the only blockchain startup under the microscope, there are at least 70 companies being investigated throughout the U.S. and Canada in what people are calling "Operation Crypto-Sweep." The crackdown is led by members of the North American Securities Administrators Association is aimed at targeting companies misleading investors through initial coin offerings or other "Investment schemes."

Jay Clayton, chairman of the U.S. Securities and Exchange Commission, released a statement on May 22nd, praising regulators for the North American ICO crackdown.