SEC Halts $1 Billion ICO of AriseBank, Discloses Criminal Background of Executives

The US Securities and Exchange Commission (SEC) has halted a fast-moving Initial Coin Offering (ICO) Initial Coin Offering (ICO) An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Acco An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Acco Read this Term) that was seeking to raise up to $1 billion from thousands of investors ‎to develop “‎the world’s first decentralized cryptocurrency bank”.

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Dallas-based AriseBank was ordered to stop its ICO and refund investor proceeds after the SEC released a report stating that “it used social media, a celebrity endorsement, and other wide dissemination tactics to raise what it claims to be $600 million of its $1 billion goal in just two months” the agency said on Monday.

The US top regulator warned investors against throwing money into the crowdsale because the company intended to launch a cryptocurrency-based ‎investment scheme without even attempting to follow US securities laws.‎

The SEC obtained an emergency asset freeze against AriseBank and filed charges against its co-founders Jared Rice and Stanley Ford, alleging that they sold securities claiming that investments in AriseBank would bring “a first-of-its-kind decentralized bank offering a variety of consumer-facing banking products and services using more than 700 different virtual currencies.”

AriseBank markets itself as a provider ‎of a full service alternative financial system that combines the strengths of ‎conventional and decentralized banks, a Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term exchange, and a ‎gold depository. ‎

The SEC alleges that AriseBank falsely claimed that it had signed an ‎agreement to buy the Federal Deposit Insurance Corporation ‎‎(FDIC) insured bank, which has been in operation in the US ‎for over a century. If it went well, the acquisition would ‎give the crypto startup a full traditional banking license, as ‎well as a global network of ATMs and debit cards.‎ AriseBank also allegedly omitted to disclose the criminal background of key executives.

The Banking Commissioner of the state of Texas has also filed a non-‎appealable cease and desist order against AriseBank, as Finance Magnates reported yesterday.

AriseBank’s case is the third to be brought by the SEC’s new cyber unit, which was created in September to target violations involving distributed ledger technology and initial coin offerings as part of a new effort to fight cyber-crime.

Earlier last month, the SEC charged PlexCoin ICO organizer Dominic Lacroix, who raised $15 million by soliciting investors from the US and Canada, with illegally profiting from defrauding customers through off-market investment pools.