The Banking Commissioner of the state of Texas has filed a non-appealable cease and desist order against AriseBank, which claims to be “the world’s first decentralized cryptocurrency bank”, ordering it to shut down operations and stop its alleged acquisitions and ICO plans.
AriseBank markets itself as a provider of a full service alternative financial system that combines the strengths of conventional and decentralized banks, a blockchain exchange, and a gold depository.
Throughout the write-up, the state of Texas lists a number of details, but it seems that the main issue that the authority has with AriseBank’s business is that the startup is using the term ‘bank’ in its name and marketing materials.
According to the order, the crypto company is not registered to do the business of banking in this state, and it is thus not allowed to offer such services to consumers in Texas.
It appears that the TX commissioner Charles Cooper is deeply skeptical of the claims made by AriseBank.
Part of the order reads: “The Cease & Desist Order was based on the Commissioner’s finding that AriseBank violated Texas Finance Code Chapter 31 by using the term “bank” in its name and marketing materials to imply that it is in the business of banking in this state. The order requires AriseBank to cease and desist from implying that they engage in the business of banking in Texas. AriseBank is further required to clearly disclose that they do not offer their services to consumers in Texas.”
Last month, AriseBank claimed that it had signed an agreement to buy the Federal Deposit Insurance Corporation (FDIC) insured bank, which has been in operation in the US for over a century. If things go well, the acquisition should give the crypto startup a full traditional banking license, as well as a global network of ATMs and debit cards.
AriseBank also announced plans to raise a billion dollars in a record ICO to finance its alleged real-time crypto-banking platform.