Investors who lost money in ShipChain’s 2017 token sale moved a step closer to a payout on September 23, when the Securities and Exchange Commission ordered $2,221,516.35 moved out of the ShipChain Fair Fund and into an escrow account for them. The money started as a $2.05 million penalty the SEC imposed in December 2020, after ShipChain sold digital tokens to the public without registering them. Years of interest pushed the balance higher. The order closes a long wait for investors who filed claims, and it leaves one question open: how much each of them will actually receive.
A $27.6 million token sale and the penalty that followed
ShipChain, Inc. raised about $27.6 million in an initial coin offering, selling more than 145 million SHIP tokens between late 2017 and early 2018, according to the SEC’s December 21, 2020 order. The company told buyers the proceeds would fund a blockchain-based shipping platform. The SEC found that the tokens were securities and that ShipChain never registered the offering, a violation of Sections 5(a) and 5(c) of the Securities Act. More than 200 people or groups bought in.
ShipChain agreed to pay a $2,050,000 civil penalty in two installments, with $1.55 million due within 14 days and the rest within 180 days. The order also required the company to hand its SHIP tokens to a fund administrator to be permanently disabled, and to ask trading platforms to delist the token. Rather than send the penalty to the U.S. Treasury, the SEC created a Fair Fund, a pool the agency can use to compensate the investors the violation harmed.
Who the Fair Fund pays
Only investors who bought SHIP tokens in the ICO pre-sale between October 1, 2017 and January 3, 2018, and who filed a certification form with the fund administrator, are in line for a payment. The window for filing is over: the September 23 order states that the claims bar date has passed and that all timely claims have been processed. Anyone who held tokens but never filed has no route into this round, and no new filing period has been announced.
Investors who filed and are waiting on a ShipChain payment can use The Settlement & Refund Recovery System, which includes the four-date rule for reading a settlement notice and a claim log and payment tracker for recording what was filed and what has arrived.
Open the ShipChain fair fund notice rule and payment log →
The distribution plan the SEC proposed in November 2024 sets out how each claimant’s share is measured. A claimant’s recognized loss is the dollar value of tokens bought in the pre-sale during the relevant period, minus the proceeds from any of those tokens sold before December 21, 2020. Each investor’s payment is then a pro rata share of the net fund after administrative costs. Any investor whose share would come to less than $10.00 is dropped, and that money is spread across the remaining claimants.
The plan offers no rescission. Investors do not hand tokens back for a refund of the purchase price, and the SEC does not promise to make anyone whole. The 2020 order had already routed the tokens to the administrator to be disabled, so the pool is a share of one penalty measured against a $27.6 million raise. The order itself gives no per-dollar rate, and the SEC has not published one.
Escrow, the fund administrator and a slow clock
The September 23 order, signed by SEC Secretary Vanessa A. Countryman, directs the transfer of $2,221,516.35 from the fund to its escrow account at The Huntington National Bank, N.A. It instructs the fund administrator to distribute the money to harmed investors in line with the approved plan, after accumulated interest, taxes, fees and expenses are accounted for. The figure is about $171,500 above the original penalty, which reflects the interest the fund earned while it waited.
Under the plan, the administrator is to start mailing checks or sending electronic payments within ten business days of the money reaching the escrow account. The SEC’s matter page names the administrator as Analytics and lists a call line at 1-844-972-8855 and a website, ShipChainFairFund.com. Miller Kaplan Arase LLP serves as tax administrator, because the fund is set up as a qualified settlement fund under Section 468B(g) of the Internal Revenue Code, which carries its own filing and withholding rules.
The calendar shows how slowly fair funds move. The SEC gave the staff until June 30, 2022 to submit a plan, and the proposed plan did not appear until November 5, 2024. The commission approved it on January 6, 2025. Payment orders came another twenty months after that. For an investor who bought tokens in the winter of 2017, the money is arriving about nine years after the purchase.
Following the ShipChain payment
The free place to confirm status is the SEC’s ShipChain distribution page, which lists the plan, the orders in the case and the administrator’s contact details. Investors who filed a certification form should have the mailing address and payment preference they gave the administrator. A change of address after filing can send a check astray, and a call to the number on the SEC page is the quickest way to update it.
Checks carry a 120-day stale date under the plan. Money from checks that go uncashed stays in the fund for possible redistribution, and whatever remains after the SEC approves the final accounting goes to the U.S. Treasury. A payment that lands in 2026 therefore has a clock of its own, and an investor who set the check aside past that date would be relying on the administrator to reissue it.
What the order does not say is how many investors share the $2.2 million, or what percentage of each loss the checks will cover. Those numbers will become public only as payments go out or when the SEC approves a final accounting, and until then the distribution amount is the only firm figure in the case.
For investors tracking a ShipChain check from escrow to mailbox, The Settlement & Refund Recovery System pairs a claim log and payment tracker with how to get an expired or uncashed settlement check reissued, next to the SEC’s free fund page.
Get The Settlement & Refund Recovery System for the ShipChain fair fund →
This article was produced with AI assistance and reviewed by The Money Overview’s editorial team.
