Supply chain startup ShipChain is taking on water fast.

The U.S. Securities and Exchange Commission ordered ShipChain to cease and desist operations Monday and pay a $2.05 million penalty for violating securities laws in 2017. ShipChain, which had raised $27.6 million through its SHIP token initial coin offering (ICO), agreed to the penalty and quickly settled the suit.

“The penalty represents substantially all of ShipChain’s net assets,” according to the order. ShipChain has further opted “to cease all operations,” the order said.

The development spells an end for a token project that’s long tacked through stormy seas.

ShipChain had sought to build an automated ledger for international trade atop the Ethereum blockchain. It sold 145 million SHIP tokens to over 200 investors in late 2017 through early 2018. An early project whitepaper explained that proceeds would power research, development, marketing, legal – basically, all operations.

That caught the early ire of U.S. securities regulators. Shortly after the ICO wrapped up, South Carolina state securities regulators ordered ShipChain to cease operations. It alleged SHIP to be unregistered security in violation of state law. But ShipChain fought back. South Carolina ultimately vacated the case and the project sailed on.

The SEC action revives those charges and swiftly wraps them up. SHIP’s buyers could reasonably expect a return on their investment deriving from ShipChain’s business efforts, SEC argued. That’s known as an investment contract – a security. Companies must register securities offerings with the SEC.

ShipChain never did. It now joins the graveyard containing the wrecks of other ICO projects sunk by Chairman Jay Clayton’s SEC.