ShipChain to be Hit by South Carolina Sanctions

Blockchain startup was ordered to immediately stop illegal activities from the Attorney General's Office of South Carolina
23 May 2018   769

This decision is caused by the alleged violation of the requirements of regulatory acts on securities operating in the state. This is reported by Coindesk.

The Securities Commissioner of South Carolina argues that the startup was engaged in the distribution of investment contracts under the guise of digital tokens, which are "the only medium of exchange on its platform."

At all times relevant to this Order, Respondent ShipChain continuously offered investment opportunities in the ShipChain platform and the corresponding tokens to South Carolina residents through its website and in-person events held in South Carolina. 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.

Attorney General's Office of South Carolina Cease-and-Desist Order

ShipChain positions itself as a blockchain-based platform for delivery tracking. It is the member of the Blockchain in Transport Alliance along with such well-known companies as FedEx and

Within 30 days, a start-up may request a hearing on the case, during which it must prove why the sale of its tokens is not the distribution of unregistered securities. Otherwise, ShipChain will be prohibited from "doing business" and "participating in any aspect of the securities industry in or out of South Carolina."

In their Twitter ShipChain reported that their lawyers intend to respond to the demand of the regulator as soon as possible.

Potentional Vulnerabilities Found in ETH 2.0

Least Authority have found potentional security issues in the network P2P interaction and block proposal system
26 March 2020   202

Technology security firm Least Authority, at the request of the Ethereum Foundation, conducted an audit of the Ethereum 2.0 specifications and identified several potential vulnerabilities at once.

Least Authority said that developers need to solve problems with vulnerabilities in the network layer of peer-to-peer (P2P) interaction, as well as in the block proposal system. At the same time, the auditor noted that the specifications are "very well thought out and competent."

However, at the moment there is no large ecosystem based on PoS and using sharding in the world, so it is impossible to accurately assess the prospects for system stability.
Also, information security experts emphasized that the specifications did not pay enough attention to the description of the P2P network level and the system of records about Ethereum nodes. Vulnerability risks are also observed in the block proposal system and the messaging system between nodes.

Experts said that in the blockchains running on PoS, the choice of a new block is simple and no one can predict who will get the new block. In PoS systems, it is the block proposal system that decides whose block will fall into the blockchain, and this leads to the risk of data leakage. To solve the problem, auditors suggested using the mechanism of "Single Secret Leader Election" (SSLE).

As for the peer-to-peer exchange system, there is a danger of spam. There is no centralized node in the system that would evaluate the actions of other nodes, so a “malicious" node can spam the entire network with various messages without any special punishment. The solution to this problem may be to use special protocols for exchanging messages between nodes.