Jared Rice Sr., who is the former CEO of the crypto decentralized startup AriseBank and the creator of the AriseCoin, pleaded guilty to defrauding investors out of more than $4.2 million in a crypto scam and this is what we are reading in the latest cryptocurrency news below.
The United States Attorney for the Northern District of Texas Erin Nealy Cox published the official announcement after Rice Sr. was arrested by the FBI at the end of December 2018. Rice has managed to make a deal with the U.S. SEC after the agency put up a civil action against him and his former executives after they scammed investors for more than $2.5 million. Nealy Cox stated:
“We will not tolerate flagrant deception of investors – virtual or otherwise.”
This kind of a plea deal Rice agreed to with Cox is one of the first of its kinds in the US Federal Court that includes crypto companies. Rice pleaded guilty on security fraud charges after he admitted that he lied potential investors into investing hundreds of dollars.
Rice was found guilty of scamming investors into buying his AriseCoin cryptocurrency which claimed to bring ‘’no-risk returns.’’ Investors placed their money right into Rice’s scam net and invested more than $4,250,000 in BTC, ETH, and LTC, into the ICO that was supposed to provide them with the AriseCoin.
He also claimed that he raised $600 million in an ICO which later turned out to be false. The US Attorney’s Office stated:
“Mr. Rice quietly converted investor funds for his own personal use, spending the money on hotels, food, transportation, a family law attorney, and even a guardian ad litem – facts he failed to disclose to investors.’’
AriseBank was named as the best-decentralized bank by Rice and he claimed that the crypto bank will provide the customers ‘’FDIC-insured accounts and transactions’’ which the United States Securities and Exchange Commission turned out to be false. He also claimed that his bank supports Visa card payments and that the platform supports hundreds of virtual currencies.
AriseBank was not authorized for providing banking services in the state of Texas. Rice is now obliged to repay the investors who lost their money and he is also facing twenty years in prison if he gets sentenced in July. Initially, he was facing up to 120 years in federal prison.