In the Matter of ShipChain, Inc. Admin. Proc. File No. 3-20185

On December 21, 2020, the Commission instituted and simultaneously settled cease-and-desist proceedings (the “Order”) against ShipChain, Inc. (“ShipChain” or the “Respondent”). In the Order, the Commission found that in late-2017 to early-2018, ShipChain, a company involved in the shipping and logistics industry, raised approximately $27.6 million by selling more than 145 million digital assets (“SHIP tokens”) in an initial coin offering (“ICO”). ShipChain told investors that ShipChain would use the funds raised in the ICO to develop a blockchain platform and “jumpstart the ShipChain economy and supplement funding to help [ShipChain] deliver the best product possible.” ShipChain violated Sections 5(a) and 5(c) of the Securities Act by offering and selling these securities without having a registration statement filed or in effect with the Commission or qualifying for exemption from registration with the Commission. The Commission ordered the Respondent to pay a $2,050,000.00 civil money penalty to the Commission. The Commission also created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalty paid can be distributed to harmed investors (the “Fair Fund”). See the Commission’s Order: Release No. 33-10909.

The Fair Fund includes the $2,050,000.00 paid by the Respondent. The Fair Fund and has been deposited in an interest-bearing account at the U.S. Department of the Treasury’s Bureau of the Fiscal Service, and any interest accrued will be added to the Fair Fund.

On December 20, 2022, the Commission issued an order appointing Miller Kaplan Arase LLP, as the Tax Administrator of the Fair Fund. See the Commission’s Order: Release No. 34-96547.

On February 24, 2023, the Commission issued an order appointing Analytics LLC, as the Fund Administrator to oversee the administration and distribution of the Fair Fund and, set the administrator’s bond amount. See the Commission’s Order: Release No. 34-96982.

On November 5, 2024, the Commission published a notice of the proposed plan of distribution and opportunity for comment and simultaneously published the proposed plan of distribution (“Proposed Plan”). The notice provides the public with 30 days to submit their comments on the Proposed Plan. See the Commission’s Notice: Release No. 34-101513 and the Proposed Plan.

The Proposed Plan provides for the distribution of the Fair Fund, plus any accrued interest, less taxes and administrative costs, to investors who purchased SHIP tokens in an initial coin offering from October 1, 2017 through January 3, 2018, inclusive, and suffered a Recognized Loss as calculated by the methodology used in the Plan of Allocation.

For more information, please contact the Commission:

Office of Distributions
Email: ENFOfficeofDistributions@sec.gov