Polychain Capital seemed to have everything going for it: It’s a cryptocurrency hedge fund helmed by the first employee at Coinbase and backed by Sequoia Capital and Andreessen Horowitz. It’s got a name that makes its blockchain bonafides pretty clear, which is perhaps the most important thing. And yet, it’s decided not to go ahead with a C$400 million share sale in Canada.
The Securities and Exchange Commission separately said it obtained a court order, unsealed late Monday, that permits a receiver to seize cryptocurrencies held by AriseBank, which allegedly marketed and received the proceeds from the coin offering. The SEC called the deal a “scam” and alleges the company and its executives misled investors about buying a federally insured bank and its ability to offer a VISA card backed by “any of 700-plus cryptocurrencies.”
AriseBank’s ICO featured some of the hallmarks of suspicious deals that the SEC has repeatedly warned about. The company signed up a celebrity endorser—retired boxer Evander Holyfield—and made heady claims about the scope of its business, claiming to be “one of the largest cryptocurrency platforms ever built” and the world’s first “decentralized bank,” according to an SEC complaint filed in federal court in Dallas.