Wednesday, January 31, 2018

SEC Shuts Down AriseBank ICO, Says It Is A (Big) Scam

The U.S. Securities and Exchange Commission said on Tuesday that it has shut down the "initial coin offering" (ICO) of Dallas-based AriseBank, calling it a "initial coin offering scam", saying that the company had used "social media, a celebrity endorsement, and other wide dissemination tactics" to raise around $600M over the last two months. The SEC said that AriseBank and its co-founders, Jared Rice Sr. and Stanley Ford, omitted to disclose the criminal background of key executives, and also falsely stated that it purchased an FDIC-insured bank. The SEC said, as a result of its actions, it has received a court approval of an emergency asset freeze over AriseBank, Rice, and Ford and appointed a receiver over AriseBank, including over its digital assets, and that it is now returning funds to investors. The agency said it is now seeking preliminary and permanent injunctions, disgorgement of ill-gotten gains plus interest and penalties, and bars against Rice and Ford to prohibit them from serving as officers or directors of a public company or offering digital securities again in the future.