Feds shut down alleged $600 million cryptocurrency scam
The Securities and Exchange Commission has shut down an initial coin offering for a little-known cryptocurrency project called AriseBank. Organizers claimed to have raised $600 million for the project—though we haven't been able to find independent confirmation of this figure. The project was also endorsed by boxer Evander Holyfield earlier this month.
The SEC says that the AriseBank ICO was legally a securities offering, and, as such, it should have been registered with the agency. Beyond that, the SEC says that the founders of AriseBank made at least two fraudulent claims as it sold its new cryptocurrency.
The decision is the latest sign that the SEC is stepping up its efforts to enforce securities laws in a realm where there had previously been hardly any regulatory oversight. Last summer, the SEC warned that using a blockchain didn't excuse anyone from the requirements of securities laws. Then last month, the SEC shut down PlexCoin, a cryptocurrency project that the agency said had "all of the characteristics of a full-fledged cyber scam." Now the commission is shutting down AriseBank—another project that seems to have some major red flags.