Prolific CEO Arrested For Crypto Fraud

Recently, the United States Federal Bureau of Investigation arrested the CEO of a cryptocurrency platform for apparently defrauding investors out of four million dollars through an Initial Coin Offering based on false claims.

In a recent announcement published by the United States Attorney’s Office of the Northern District in Texas, Jared Rice senior scammed investors by claiming that his firm, ArisBank to be the first decentralised bank in the world, which offered FDIC insured bank accounts and Visa-linked credit and debit cards. Along with this, the cryptocurrency related services based on its own token, AriseCoin.

The CEO has now been charged with three counts of securities and fraud as well as three counts of wire fraud. The Securities and Exchange Commission hit pause on the project and froze their assets months ago and explained that AriseBank’s claims were fake.

The company doesn’t actually have a partnership with Visa and it isn’t allowed to conduct banking services in Texas as per the Justice Department. On top of this, the FDIC isn’t doesn’t have insurance. Rice Sr. was also accused of lying about raising up to $600 million in just a few weeks through the organisation’s ICO and is apparently said to have spent raised funds for personal use on food, a family attorney, clothing and more.

The US Attorney for the Northern District of Texas, Erin Nealy Cox was quoted saying:

“My office is committed to enforcing the rule of law in the cryptocurrency space. The Northern District of Texas will not tolerate this sort of flagrant deception – online or off.”

AriseBank and AriseCoin were founded in June 2017 and were promoted through press releases, interviews and social media sites. Rice is now looking at 120 in federal prison according to the attorney's office.

Back in January the SEC actually had a lawsuit against Rice and with his co-founder Stanley Ford for fraud and issuing unregistered securities. At the time, the Texas Department of Banking issued a cease and desist order against the company.

As reported by CryptoGlobe:

"Complaints from February show that Rice is currently on probation as part of a plea deal made after he was accused of theft and of tampering with government records. He’s also under felony indictment after allegedly assaulting a victim, and attempting to destroy evidence by stealing the victim’s phone to delete incriminating files."