The United States Securities and Exchange Commission (SEC) recently shut
down a reportedly fraudulent initial coin offering (ICO) that was targeting
retail investors in order to fund that it called the first “decentralized
bank” in the world.
According to the complaint the SEC filed in a federal district court on
January 25, AriseBank used dissemination tactics including a celebrity
endorsement and social media to raise an alleged $600 million of their
goal of $1 billion over two months.
The complaint stated that AriseBank and its co-founders Stanley Ford and
Jared Rice Sr. were allegedly offering and selling unregistered investments
in “AriseCoin”, their own form of cryptocurrency, by positioning
the company as a unique decentralized bank that offered a number of services
and consumer-facing products that use more than 700 different types of
virtual currencies. On top of this, the company failed to disclose the
fact that multiple key executives had criminal backgrounds.
AriseBank, Rice Sr., and Ford’s assets were frozen following court
approval, and a receiver was appointed over the company, including over
its digital assets. The SEC stepped in to prevent the digital assets from
being dissipated, and enabled the receiver to secure the various cryptocurrencies
held by the company, including Dogecoin, Bitshares, BitUSD, Litecoin,
and Bitcoin. The public sale began on December 26, 2017 and was set to
finish on January 27, and distribution to the investors was set to occur
on February 10. The SEC is currently seeking bars prohibiting Ford and
Rice Sr. from serving as directors or officers for public companies that
offer digital securities in the future, preliminary and permanent injunctions,
and disgorgement of any ill-gotten gains plus penalties and interest.
If you were the victim on an investment scam, it is in your best interest
to seek legal counsel. At Meyer Wilson, our investment fraud lawyers have
represented nearly 1,000 clients from across the nation fight for and
recover their lost funds. Give us a call at 888-390-6491 to speak with
a member of our firm, or
fill out our online form to set up a free case consultation today.