Home Crypto Altcoin News AriseBank CEO faces 120 years in jail for million-dollar scam

AriseBank CEO faces 120 years in jail for million-dollar scam

The CEO of blockchain startup AriseBank, Jared Rice, is facing up to 120 years in prison for a million-dollar scam.

30 year-old Jared Rice was arrested by the FBI on the 28th of November, as announced by the U.S. Attorney’s Office of the Northern District of Texas. He was charged for defrauding hundreds of investors out of over $4 million. The money was used for private luxuries such as hotels, food and clothes.

But that was not it – the CEO has a number of convictions on his back. Rice offered customers FDIC-insured accounts and traditional banking services, including Visa-brand credit and debit cards. However, AriseBank was not authorized to conduct banking in Texas, was not FDIC (Federal Deposit Insurance Corporation) insured, and did not actually have any partnership with Visa.

On top of that, he falsely claimed that AriseBank’s ICO raised $600 million within a few weeks, even though in reality only $4 million was raised. Rice was indicted on three counts of securities fraud and three counts of wire fraud.

Without disclosing his prior guilty plea to state felony charges in regards to a different online business scheme, Rice continued to accept his tokensales in Bitcoin, Ethereum, Litecoin, and fiat currency.

Rice claimed to his investors that AriseBank was to be the “first decentralized banking platform” using the digital currency AriseCoin. Rather than playing the role of a central exchange, the company promised not to hold any cryptocurrency funds, and would give “people the freedom to hold, send, receive, buy, sell and spend cryptocurrency directly from their computer or mobile device.”

“My office is committed to enforcing the rule of law in the cryptocurrency space,” says U.S. attorney Erin Nealy Cox. “The Northern District of Texas will not tolerate this sort of flagrant deception – online or off.”

If Rice’s indictment is found guilty, he is convicted up to 120 years in federal prison.

Rice’s fellonies do not stop here. In January this year, Rice was sued by the U.S. Securities and Exchange Commission (SEC) for  alleged fraud and issuing unregistered securities during AriseBank’s ICO.

In February, a SEC complaint states that Rice is on probation as a part of a plea bargain in Texas, an indictment in 2015 for theft and tampering with government records. He is also under felony indictment for an assault, followed by destroying the evidence of the crime by stealing the victim’s phone and deleting the recording of the incident.

Photo from Unsplash

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Inbar Preiss
Inbar Preiss
A journalist and writer interested in crypto from a social, cultural, political and philosophical point of view. Let decentralization transform societies to have more empowered individuals.

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