The Securities and Exchange Commission (SEC) has just made record-breaking news in the world of cryptocurrencies. Dallas-based AriseBank, using social media and a celebrity endorsement, appears to have raised $600 million of its $1 billion goal for an initial coin offering (ICO) in just two months. That looks like it is no longer going to occur.

The SEC obtained a court order halting the allegedly fraudulent initial coin offering that targeted retail investors to fund what was being represented as the world’s first decentralized bank. AriseCoin’s public sale began around December 26, 2017, and was originally scheduled to conclude on January 27, 2018, with distribution to investors on February 10, 2018.

According to the SEC’s press release, AriseBank and its co-founders, Jared Rice Sr. and Stanley Ford, allegedly offered and sold unregistered investments in the “AriseCoin” cryptocurrency. AriseBank was depicted as a first-of-its-kind decentralized bank, offering a variety of consumer-facing banking products and services using more than 700 different virtual currencies. The SEC also alleged that AriseBank’s sales pitch claimed that it developed an algorithmic trading application that automatically trades in various cryptocurrencies.

The SEC has further alleged 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.  And to add even more fuel to the fire in the charges, the SEC also has alleged that AriseBank omitted to disclose the criminal background of key executives.

The court has approved an emergency asset freeze over AriseBank, Rice and Ford and appointed a receiver over AriseBank, including over its digital assets. Tuesday’s news report indicated that the SEC intervened to protect the digital assets that had been raised before they could be dissipated, enabling the receiver to immediately secure various cryptocurrencies held by AriseBank, including Bitcoin, Litecoin, Bitshares, Dogecoin and BitUSD.

The SEC is seeking preliminary and permanent injunctions, disgorgement of ill-gotten gains plus interest and penalties, and bars Rice and Ford from serving as officers or directors of a public company or offering digital securities again in the future.

To get right to the point, the SEC is alleging that the coin offering was an outright scam. This also appears to be the first time that the SEC has sought the appointment of a receiver in connection with an initial coin offering fraud.

AriseBank has a Twitter account under the same @AriseBank name, and as of Tuesday it was shown to have made 1,041 tweets and had 9,419 followers and 743 “likes.” Its Twitter description said:

The first #decentralized #bank, integrated with over 700 #cryptocurrencies, the home to @AriseCoin and many other awesome #blockchain solutions.

On January 26, the Texas Department of Banking issued a cease and desist order relating to AriseBank. That order said:

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.

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