Many red flags were raised with the way Arisebank conducted their funding campaign and the subsequent information released to investors. A major problem arose when Arisebank claimed to have purchased a 100-year-old bank, thus allow the company to cover its customers under federal deposit protections. They ended up walking back that statement, saying because of the decentralized nature of the AriseBank that it was wholly unnecessary for the platform to be FDIC regulated or insured as the individual users maintain full control of their funds.
AriseBank is but one of a numerous cryptocurrency services being offered by 45-year-old Stanley Ford and 29-year-old Jared Rice Jr The pair embarked upon the project in 2017, announcing an ICO toward the end of the year, according to Ars Technica. Yet concerns were raised about the non disclosure of the criminal past of one of the founders, Jared Rice, who pled guilty to felony theft and tampering with government records in 2015 and is currently on probation.
The decision is the latest signal that the SEC is ramping up efforts to enforce securities laws in the area of blockchain investment vehicles. Last summer, the SEC warned that using a blockchain didn't excuse anyone from the requirements of securities laws. The move comes a month after the SEC shut down PlexCoin, a cryptocurrency project that the agency stated had "all of the characteristics of a full-fledged cyber scam." Now the commission has shut down AriseBank, another project that seems to have been just as dubious.