Texas issues cease and desist order against ‘cryptocurrency bank’ AriseBank
AriseBank violated Texas’ finance code by using the term “bank” in its name and marketing materials.
The state of Texas has effected a cease and desist order against a company using multiple websites, claiming to be a “cryptocurrency bank”, disclosing that they must no longer offer their services to consumers in Texas.
The order was issued by Texas Department of Banking commissioner Charles G. Cooper against AriseBank and its entities on January 5, 2018.
AriseBank violated Texas’ finance code by using the term “bank” in its name and marketing materials. The order requires AriseBank to cease and desist from implying that it engages in the business of banking in Texas. AriseBank is also required to “clearly disclose” that they do not offer services to consumers in Texas.
Arisebank purported to be a cryptocurrency bank with locations in Texas, UAE and Switzerland. Despite these claims the company was not chartered in Texas, nor registered with any state or federal regulatory agency.
AriseBank had the right to request a hearing by making a submission to the banking commissioner. However, because no such request was submitted the order became effective and non-appealable on January 26, 2018.
In a press release issued January 18, AriseBank claimed it was “the first decentralized bank” that could “offer its customers FDIC-insured accounts and transactions”. However, in a January 25 press release the company backtracked on its initial statement, saying it “will never offer FDIC-insured accounts to our users”.
During a podcast interview on Coast to Coast AM on January 27, AriseBank co-founder Jared Rice, Sr. said US Securities and Exchange Commission (SEC) agents stormed his property and seized all company assets.
On the same day AriseBank was issued the cease and desist order, former American professional boxer Evander Holyfield personally endorsed the company by posting a statement and image on his official Twitter account.
— Evander Holyfield (@holyfield) January 5, 2018
As of press time, AriseBank’s website remains offline and unavailable.
The Texas Department of Banking said consumers should consider any communication or solicitation involving AriseBank to be an attempt to obtain funds by an unauthorized and unregulated entity. Those with information about this purported bank or its website should contact the Department’s Consumer Assistance Activities.