Jared Rice Sr., AriseCoin creator and AriseBank CEO, was sentenced to five years in prison for a $4.25 million (~£3.1 million) crypto scheme, as revealed on the official website of the US Attorney’s Office for the Northern District of Texas on 25th August.
The AriseBank team lured investors to part with their money operating under the guise of the world’s “first decentralised banking platform”. Potential victims were offered to purchase the firm’s native crypto, AriseCoin.
According to the probe, the scammers managed to attract $4.25 million (~£3.1 million) worth of digital assets. All funds were transmitted in crypto, primarily in Bitcoin (BTC) and Ethereum (ETH). US law enforcement agencies report that the funds were converted for scammers’ personal use, including spendings “on hotels, food, transportation, a family law attorney, and even a guardian ad litem”.
In order to curry favour with investors, the scammers claimed each account was FDIC-insured and offered some traditional banking services, including Visa credit cards.
The court ordered Jared Rice Sr. to indemnify AriseCoin investors against their losses. Ironically, law enforcement agencies managed to arrest the CEO back in 2018.
“My office is committed to enforcing the rule of law in the cryptocurrency space,” said Nealy Cox, Former US Attorney for the Northern District of Texas, in 2018. “The Northern District of Texas will not tolerate this sort of flagrant deception – online or off.”
The AriseCoin inventor voluntarily confessed to one count of securities fraud in March 2019, which truly came as a shock to the crypto world. Such a case has reportedly occurred for the first time in the history of the United States.
Remarkably, the confession has significantly reduced the prison sentence Rice is facing. While initially the CEO could have been jailed for 120 years, later the term was reduced to 20, and now the sentence remains within five years in prison.
Back in 2018, the activities of the AriseBank crypto banking platform were banned in Texas. In December 2020, the US Securities and Exchange Commission (SEC) fined former AriseBank executives $2.8 million (~£2.04 million).
Notorious crypto CEO Jared Rice Sr. is facing five years in prison after defrauding AriseBank investors to the tune of more than $4 million (~£2.9 million). Seems pretty cut and dried, however, the world was astounded by the indicted CEO’s confession, which considerably lessened his sentence.
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