SEC Takes Emergency Action to Stop ICO
As promised, the U.S. SEC said it would vigorously stop bad actors in the digital token space, and it is doing just that. This newest case is the SEC’s biggest intervention to date, calling for emergency action against AriseBank, a Dallas-based firm.
See this intro from the Wall Street Journal:
The Securities and Exchange Commission took emergency action to halt an initial coin offering that allegedly raised $600 million in what amounts to the regulator’s biggest intervention yet into the world of raising money by issuing digital tokens.
Initial coin offerings are similar to crowdfunding, but offer investors a digital token in exchange for an investment in the sponsor’s enterprise or project.
The SEC said it obtained a court order, unsealed late Monday, that permits a receiver to seize cryptocurrencies held by Dallas-based AriseBank, which allegedly marketed and received the proceeds from the ICO. The SEC alleges the company committed fraud by misleading investors about its relationship with a federally insured bank and its ability to offer customers a VISA card backed by “any of 700-plus cryptocurrencies.”
Read the full WSJ article, here.