The CEO of Arisebank, touted as “the world’s first decentralized banking platform,” has been sentenced to five years in prison and ordered to pay $4,258,073 in restitution. He admitted that he lied to investors while quietly converting their cryptocurrencies for his personal use.
CEO of ‘the World’s First Decentralized Banking Platform’ Heading to Jail
The U.S. Department of Justice (DOJ) announced Wednesday that Arisebank CEO Jared Rice Sr. has been sentenced to five years in prison in a “$4 million crypto scheme.” Acting U.S. Attorney for the Northern District of Texas, Prerak Shah, announced:
The inventor of cryptocurrency Arisecoin was sentenced today to five years in federal prison for duping investors out of more than $4 million.
Rice, 33, settled a civil action filed by the U.S. Securities and Exchange Commission (SEC) last year involving Arisecoin’s initial coin offering (ICO) in 2018. He pleaded guilty to one count of securities fraud in March 2019.
On Wednesday, U.S. District Judge Ed Kinkeade ordered him to pay $4,258,073 in restitution, the Justice Department detailed.
The plea papers state that Rice “admitted he lied to would-be investors,” claiming that Arisebank could offer consumers “FDIC-insured accounts and traditional banking services, including Visa-brand credit cards, in addition to cryptocurrency services.” The DOJ noted that the bank was “billed as the world’s ‘first decentralized banking platform.'”
While touting nonexistent benefits of Arisebank, “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,” the Department of Justice described.
Moreover, Rice also “failed to disclose that he’d plead guilty to state felony charges in connection with a prior internet-related business scheme,” the DOJ said, adding:
Hundreds of investors bought approximately $4,250,000 in Arisecoin using digital currencies like bitcoin, ethereum, and litecoin, as well as fiat currency.
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