The U.S. Securities and Exchange Commission has obtained a court order to halt an allegedly fraudulent initial coin offering by Dallas-based AriseBank, which was depicted as the world’s first decentralized cryptocurrency banking product, it was announced Tuesday.
The SEC noted that AriseBank used a celebrity endorsement as one tactic to raise what it claims to be $600 million of its $1 billion goal in just two months. That endorsement came from Evander Holyfield, as both AriseBank and the four-time boxing heavyweight champion of the world had spread word of it earlier this month on social media.
Holyfield, 55, has no comment on Tuesday’s events surrounding AriseBank, his spokesman told SportTechie.
Boxing legend and Hall of Famer Evander Holyfield has officially endorsed @AriseBank @BitShares Join the biggest fight in history. #arisebank $BTS #BTS pic.twitter.com/L7wdp2GHV9
— Evander Holyfield (@holyfield) January 8, 2018
It had been announced after the initial endorsement that Holyfield was teaming up with AriseBank in “a long-lasting strategic partnership” to raise money for humanitarian disaster preparedness using blockchain-based platform BitShares.
Holyfield’s digital currency endowment — The Holyfield BitShares Endowment for Global Disaster Preparedness — was to have raised a million dollars in donations grow to a billion-dollar endowment and be able to be paid out to victims of future disasters over the course several years.
“I am really excited about this. The more I can do, the better. Cryptocurrency seems to be a good way to help the causes that I care about,” Holyfield said in a statement at the time.
The SEC had warned in November that endorsements from celebrities using social media to promote initial coin offerings “may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement.”
Now, the court approved an emergency asset freeze over AriseBank and appointed a receiver over its digital assets. The website at this time is offline.
“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,” Stephanie Avakian, Co-Director of the SEC’s Enforcement Division, said in a statement. “We sought emergency relief to prevent investors from being victimized by what we allege to be an outright scam.”
AriseBank got caught selling an alleged ICO to investors and the SEC
shined a light and put a stop to the fake scheme https://t.co/s5inxTEAuP— SEC Enforcement (@SEC_Enforcement) January 30, 2018