The vision of Jared Rice and Stanley Ford to offer the first decentralized bank that was offering its currency to investor were halted by SEC sometime back. This is after the US Securities and Exchange Commission found the founders above to be operating a fraudulent Initial Coin Offering. Besides their dream been stopped by the SEC, the Dallas federal court has ordered the two to pay fines amounting to $2.7 million for their activities.
To get investors Rice and Ford pitched their AriseBank as the first of its kind decentralized bank with AriseCoin as its centerpiece. Further on they purported their bank was providing traditional banking services. Furthermore, they claimed ArsieBank was offering FDIC-insured accounts and debit cards and Visa-brand credit services. Rice was arrested on the 28th of November by the FBI, but they were able to defraud investors $4 million. To reach investors Rice and Ford used social media and press media.
In detail, Rice and Ford have been barred from servicing in any office as directors or officers for life. Further on they were ordered to pay $184,767 as civil penalties fine. Besides that, the two are supposed to pay $68,423 and $2,259,543 as prejudgment and disgorgement respectively. Also, they are not to participate in any digital coin offerings. Although Rice and his co-accused didn’t agree or deny the allegations against them, they agreed to pay the fines. Judge Barbara M.G Lynn of the US District Court for the Northern District of Texas is the one who issued the order.
Besides the above firm’s operations been halted by SEC in November, SEC issued a cease and desist order to CoinAlpha Advisors LLC. Apart from the latter order, the persons behind CoinAlpha Advisors were fined $50,000. The founders were able to get over $600,000 from pitching their idea to investors. Similarly, SEC found out that CoinAlpha Advisors LLC violated securities laws in place for running an unregistered entity. Apart from Rice and Ford Mark Steven Royer alongside My Crypto Mine, an investment firm he is associated with were slapped with a cease and desist order by the Securities Commissioner of the US State of Texas. Besides fining the founders behind these sham ICOs SEC has also gone a step further and is fining celebrities marketing some of the sham ICOs. It’s only recently that boxing chap Floyd May Weather and DJ Khaled were fined.