Dallasites, Texans and all others interested in cryptocurrency, freeze for a moment. The SEC has halted AriseBank’s initial coin offering (ICO).
The SEC’s Fort Worth office has its hands full with this case. Using all the key buzzwords like decentralized bank, cryptocurrency, and algorithmic trading application, AriseBank may have defrauded investors of more than $600 million in a matter of months. The SEC obtained an emergency asset freeze, and is investigating several matters:
- The day after Christmas marked the first day of AriseCoin’s™ public sale, and by January 18 they claimed to have raised over $600 million in a PR Release .
- According to the SEC complaint, CEO Jared Rice is currently on probation for felony theft and tampering with government records in an unrelated matter.
- President, Kelvin Spencer, also has a criminal background. He served five years for felony robbery. See the SEC Complaint
- AriseBank falsely claimed the purchase of an FDIC-insured bank.
- The best of socialism? The company’s description of AriseCoin in a PR Release: “AriseCoin™ is a new digital currency and payment system that combines the best features of capitalism and socialism, without the defects. It is a cryptocurrency that works in the decentralized digital environment without a traditional, central bank….”
- Is Evander Holyfield an endorser? See an archived copy of the AriseBank’s website. It’s likely Mr. Holyfield had absolutely no knowledge of what was happening, but a celebrity endorsement was used to validate the offering.
- Texas Banking Commissioner issued a cease and desist order on January 5 for the improper use of the term, “bank.”
We are just hearing the beginning of this saga. Commercial lawsuits aren’t far away. In the meantime, investors be wary. Spend some time up-front investigating company claims and the background of key individuals before investing. AriseBank’s story, while a quick tale, is not an isolated case. To learn more about AriseBank check out the SEC Press Release, as well as an American Banker article summarizing an interview with CEO Jared Rice, Sr. on January 24th
While the digital age provides us an amazing amount of research at our fingertips, it also is a fantastic vehicle for fraudsters to lure us into their dens. Whenever you find yourself in need of commercial lawyer or a breach of contract attorney, we are ready to help.
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