The United States Securities and Exchange Commission recently froze all of the assets of a Texas-based ICO. Which supposedly managed to attract over half a million dollars.
What happened between the AriseBank ICO and the US Government?
AriseBank is a cryptocurrency bank that planned on offering its clients banking services related to the cryptocurrency industry, as well as a fully functional Visa credit card.
As per an order release made by the Texas Department of Banking on Jan. 26, the government entity required the ICO to cease its decentralized cryptocurrency banking operations within the state of Texas. Arise had 21 days to respond to the state of Texas, yet failed to do so.
However, just a day before the order appeal deadline expired, AriseBank came out with a public statement, disclosing that their operations do not require them to be FDIC insured, and therefore, they are not at fault. Which is quite a peculiar statement coming from Arise. Considering that they were in the process of purchasing two FDIC insured banks.
Additionally, the SEC believes that AriseBank’s tokens fall under the security category, and furthermore, did not exclude US citizens and residents. Thus, the ICO is seen to be in violation of US federal security laws.
What the future holds for Arise and other ICO’s.
Well, recent developments definitely spell out bad news for AriseBank and other ICO’s that think that they can fly under the SEC’s radar. The fact that Arise claims to have attracted around $600 million of their $1 billion ICO goal just adds more fuel to the flame. It’s also quite difficult to believe.
Readers, it’s important to understand that the SEC is simply looking out for the safety of US investor assets. There is no way to say it better than did the co-head of the SEC, Steve Peikin, “We will use all of our tools and remedies to protect investors from those who engage in fraudulent conduct in the emerging digital securities marketplace.”
Therefore it should come as no surprise that a project aiming to raise as much as AriseBank came under the agencies radar. This situation should act as an alarm for future companies contemplating on diving into the Blockchain and ICO game. And as a wake-up call to those already in it, yet play games with the success of their project by not having all pertinent legal matters in check.
Things do not look good for AriseBank and its team. Actually, they are probably totally done for now.