One of the first startups sued by U.S. regulators over its initial coin offering will pay $2.3 million after being accused of scamming investors through claims such as building a cryptocurrency bank, the Wall Street Journal reported. AriseBank and its founders, Jared Rice and Stanley Ford, sold their virtual coin at the height of the cryptocurrency bubble in late 2017 and early 2018. The Dallas-based company claimed to have raised $600 million and touted a celebrity endorsement from former boxing champion Evander Holyfield. The company vowed to set up over 1,000 ATMs that would let users tap into their cryptocurrency accounts, a claim that attracted scrutiny from legitimate crypto entrepreneurs who doubted its claims and informed regulators. AriseBank instead took in about $4.25 million from hundreds of investors, according to a criminal indictment of Mr. Rice that was unsealed on Nov. 28. A receiver and a cybersecurity consultant appointed to trace AriseBank’s assets eventually found cryptocurrencies worth about $1.1 million, according to a court summary from August. Other funds couldn’t be located and were presumed to have been spent.
