An initial coin offering for a cryptocurrency project known as AriseBank has been shut down by the Securities and Exchange Commission.
AriseBank is one component of a broad range of cryptocurrency services being offered by 29-year-old Jared Rice Jr. and 45-year-old Stanley Ford. The pair embarked upon the project in 2017, announcing an ICO toward the end of the year, according to Ars Technica.
The white paper detailing the cryptocurrency asserted that it would bring together the best aspects of capitalism and socialism. “It’s capitalism without the inequality and socialism without the lack of opportunity,” read the document.
There were claims that AriseBank had raised some $600 million in funding for the project, and even celebrity endorsements. However, in the wake of the SEC’s action against the company, it seems that the cryptocurrency has gone down in flames.
The SEC ruled that the AriseBank ICO is a securities offering in legal terms and as such, it should have been submitted to the commission ahead of time. It also said the company’s founders made at least two fraudulent claims while marketing the cryptocurrency.
AriseBank claimed to be collaborating with a financial technology company called Marqeta to facilitate payments using the Visa network. Marqeta has since denied any knowledge of such an agreement in a public statement.
The AriseBank team also professed to have acquired KFMC Bank Holding Company, an FDIC-insured bank, which would allow it to field banking products that other cryptocurrency firms could not. According to the SEC, KFMC is not insured by the Federal Deposit Insurance Corporation.
Now that cryptocurrency is beginning to hit the mainstream, government bodies are starting to pay closer attention. It remains to be seen what sort of effect this will have in the long term, but there are reasons to welcome this expanded oversight.
AriseBank seems to have been adopting some shady practices, and we’ve seen various other misdeeds pertaining to cryptocurrency in recent months — the wave of ‘malvertisements’ is one way people are abusing the technology. With the authorities taking more interest in its potential for illegal activity, we’ll perhaps see less activity of this kind.
