FBI Arrests AriseBank CEO Over $ 4 Million Crypto Fraud

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The FBI has arrested the CEO of cryptocurrency platform
AriseBank after he was indicted over an alleged multi-million
dollar scam.
The news was announced Wednesday by the U.S. Attorney’s Office
of the Northern District of Texas, which states that 30-year-old
Jared Rice Sr. tricked hundreds of investors out of over $4 million
and has now been charged with three counts of securities fraud
and three counts of wire fraud.

Rice allegedly lied to prospective investors, claiming that the firm,
which he called the “first decentralized banking platform,” would
offer FDIC-insured bank accounts and Visa-linked debit and credit
cards, in addition to crypto services based on its own AriseCoin
token.

However, in reality, AriseBank wasn’t authorized to conduct
banking services in Texas, was not FDIC insured, and had no
partnership with Visa, the Justice Department states.
Rice is also accused of lying about raising “$600 million within
just a few weeks” through an initial coin offering (ICO). Moreover,
he spent investors’ money for his own personal use on hotels,
food and clothing and more.

After the firm’s formation, he began promoting AriseBank and
AriseCoin around June 2017 through press releases, public video
interviews, social media outlets and his own websites, according
to a court document unsealed Wednesday.
If convicted, Rice faces up to 120 years in federal prison, the
Attorney’s Office said.
Erin Nealy Cox, the U.S. Attorney for the Northern District of
Texas, said:

“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.”

In January, Rice was also sued by the U.S. Securities and
Exchange Commission (SEC), together with his co-founder Stanley
Ford, for alleged fraud and issuing unregistered securities during
an ICO. The Texas Department of Banking issued AriseBank a
cease-and-desist order in the same month.
An SEC complaint from February further states that Rice is on
probation as a part of a plea deal stemming from a Collin County,
Texas, indictment in 2015 for theft and tampering with government
records. He is also under felony indictment in Dallas County,
Texas, for assault, after which he allegedly destroyed evidence by
stealing the victim’s phone and deleting an audio recording of the
incident.

Source : https://www.coindesk.com