The AriseBank ICO has been halted by the United States Securities and Exchanges Commission (SEC) over suspicion that it is a scam.
The SEC froze assets of AriseBank and its co-founders Jared Rice Sr. and Stanley Ford. Further the federal district court in Dallas, Texas, appointed a receiver over AriseBank, including over its digital assets.
According to the SEC, AriseBank raised $600 million of its $1 billion goal in just two months through a range of tactics including social media promotions, celebrity endorsements among others. SEC alleged that AriseBank falsely stated that it purchased an FDIC-insured bank which enabled it to offer customers FDIC-insured accounts and that it also offered customers the ability to obtain an AriseBank-branded VISA card to spend any of the 700-plus cryptocurrencies.
AriseBank also allegedly omitted to disclose the criminal background of key executives according to the SEC.
On January 25, AriseBank issued a clarification and correction wherein it said that it providers people with the freedom to hold, send, receive, buy, sell and spend cryptocurrency directly from their computer or mobile device. This means that AriseBank cannot and will not ever control the money of its users. People maintain their own stock of cryptocurrency holdings and any user may hold, send, receive, buy, sell and spend them, when needed.
Because of the decentralized nature of the AriseBank software, it is wholly unnecessary for the platform to be FDIC regulated or insured as the individual users maintain full control of their funds, AriseBank said.
SEC says they “intervened to protect the digital assets before they could be dissipated, enabling the receiver to immediately secure various cryptocurrencies held by AriseBank including Bitcoin, Litecoin, Bitshares, Dogecoin, and BitUSD,” but do not state whether they now control the full amount invested.