The SEC shut down an ICO by AriseBank, which had been trying to raise hundreds of millions of dollars from investors. Its founders had claimed that they intended to hit a target of $1 billion. Besides that, it had claimed that it had already acquired a US bank, which had federally insured deposits. Additionally, the SEC accused AriseBank of failing to disclose the criminal background of its executives.
AriseBank Disputes Claims
The bank disputed the claims and said that it was mere confusion over its activities. It has described itself as a decentralized banking platform for digital assets. The bank began raising funds last years via an ICO for its own coin, dubbed AriseCoin. At the start of this month, it claimed to have raised about $600 million and was aiming to continue with the ICO until it reached $1 billion.
SEC Refute Claims
According to the SEC, the bank was not federally insured, neither had it made any purchase of a US bank. The commission added that it was aiming to “halt an ongoing, fraudulent, and unregistered offering of securities to protect investors who are being actively defrauded.” Furthermore, the SEC said that Jared Rice Sr was on probation for tampering with government records. The President of the bank, Kevin Spencer had also previously served five years in jail for robbery.
Attempts by news reporters to get in touch with executives of the bank were not successful. However, Mr. Rice told a radio interviewer that the firm intended to fight the action. He blamed the raid on its facility as resulting from confusion. He said, “We have nothing to hide.”
This Could Be Part of Broader Action Against ICOs
The chairman of the SEC has said that some ICOs would now be subjected to security laws. The SEC has continually warned people to be wary of ICOs. In the first 11 months of 2017, over $3.5 billion was raised globally from these activities, which have drawn the attention of regulators in Hong Kong, Canada, Singapore, and the UK. In China, all such activity and anything to do with cryptocurrencies is banned.
Last month, the chairman of the SEC said that most of these ICOs appeared to be securities and would be subject to securities laws. He said that the agency would intensely police this area.
In a blog post, the Chairman said,
Such activity that involves an offering of securities must be accompanied by the important disclosures, processes, and other investor protections that our securities laws require.
What do you think about the crackdown on AriseBank by the SEC? Leave us your thoughts in the comments section below.
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