AriseBank Founders to Pay $2.7 Million in Fines to Settle ICO Fraud Charges

A United States federal court has ordered two executives from crypto firm AriseBank to pay nearly $2.7 million in fines, according to a U.S. Securities Exchange Commission announcement Dec. 12.

The ruling follows an investigation by the SEC, which found that AriseBank was operating a fraudulent Initial Coin Offering.

AriseBank CEO Jared Rice was arrested by the Federal Bureau of Investigation on Nov. 28 on charges of defrauding hundreds of investors of over $4 million.

Rice allegedly falsely claimed that the bank could offer customers "FDIC-insured accounts and traditional banking services, including Visa-brand credit and debit cards, in addition to cryptocurrency services."

Per today's announcement, AriseBank founders Rice and then-COO Stanley Ford are held liable for $2,259,543 in disgorgement plus $68,423 in prejudgment interest.

Rice allegedly spent investors' funds for his personal ends, while posting AriseBank's "Nonexistent" benefits both in printed press releases and online.

The fund had allegedly raised over $600,000 from 22 investors, which purchased limited partnership interests in the fund in exchange for a proportional share of any profits derived from the fund's investment in digital assets.

In November, the Securities Commissioner of the U.S. State of Texas issued an emergency cease and desist order against crypto investment firm My Crypto Mine and its principal Mark Steven Royer.

The order alleged that Royer "Acting on behalf of a white-collar criminal [Bruce Bise] and disbarred attorney , offered tokens that are now nearly worthless" via a crypto investment scheme dubbed "BitQyk."

The SEC chairman Jay Clayton reiterated his wary view of crypto markets.