SEC Halts Crypto-Currency Scam
By Sean Sweeney on February 08, 2018
As the crypto-currency bubble continues to grow, the SEC has obtained a court order halting a coin offering that targeted retail investors for a cryptocurrency called "AriseCoin."
According to the SEC Press Release,
The SEC alleges that AriseBank falsely stated that it purchased an FDIC-insured bank which enabled it to offer customers FDIC-insured accounts and that it also offered customers the ability to obtain an AriseBank-branded VISA card to spend any of the 700-plus cryptocurrencies. AriseBank also allegedly omitted to disclose the criminal background of key executives.
“We allege that AriseBank and its principals sought to raise hundreds of millions from investors by misrepresenting the company as a first-of-its-kind decentralized bank offering its own cryptocurrency to be used for a broad range of customer products and services. We sought emergency relief to prevent investors from being victimized by what we allege to be an outright scam,” said Stephanie Avakian, Co-Director of the SEC’s Enforcement Division.
For the investors in AriseCoin it is uncertain whether they will be able to recover their money. These kinds of initial coin offerings "ICOs" are rife with potential for fraud and scams, As the SEC explained in a recent investor bulletin:
Be especially cautious regarding stock promotions, including related to new technologies such as ICOs. Look out for these warning signs of possible ICO-related fraud:
- Company that has common stock trading claims that its ICO is “SEC-compliant” without explaining how the offering is in compliance with the securities laws; or
- Company that has common stock trading also purports to raise capital through an ICO or take on ICO-related business described in vague or nonsensical terms or using undefined technical or legal jargon.
If you have been the victim of an ICO or other securities scam, you may have a claim to recover your funds. If your investment was through a broker, for most customers, they will have signed a FINRA arbitration agreement to resolve disputes, including claims for reimbursement of these types of investment losses. As the SEC reminds investors, it can be important to find an attorney that “specializes in resolving securities complaints.”
If you were a victim of an ICO scam and suffered investment losses, please contact Attorney Sean M. Sweeney at 414-755-5020 or firstname.lastname@example.org to see if we can help recover your funds.
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