AriseBank CEO Gets Busted By FBI For Over $4 Million Dollar Fraud

By Sumedha Bose

AriseBank, which is supposedly the “first decentralized crypto bank” of its kind, finds itself facing some troubled times ahead. Their CEO, 30-year old Jared Rice Sr. has been taken in custody by the FBI on Nov. 28. He is being indicted for the crime of defrauding hundreds of investors out of over $4 million.

(Read more about: The top 10 blockchain scams of 2018)

The news first broke on the U.S. Department of Justice (DOJ)’s website via a release from the U.S. Attorney’s Office for the Northern District of Texas. This is not even the first time that Jared has been facing legal charges. Back in February, he was indicted on three counts of securities fraud and three counts of wire fraud, for a single cryptocurrency scheme. He was cornered by the U.S. Securities and Exchange Commission (SEC)’s Fort Worth regional office.

This time around, attorney Erin Nealy Cox has revealed that ice’s AriseBank scheme’s pitch as the world’s “first decentralized banking platform” is untrue. He allegedly claimed that his Initial Coin Offering (ICO) for AriseBank’s proprietary digital token, AriseCoin, had raised $600 million within weeks, but it was later found out that this information was untrue.

(Read about: SEC Enforcement Report Dominated By Discussion on ICO Malpractice)

Rice did not divulge to his investors that he had previously plead guilty to felony charges in connection with a separate web-based business scheme. Back in January, Texas regulators had issued an unconditional Emergency Cease & Desist Order to the self-described ‘cryptocurrency bank.’ The bank was ordered to halt its services to the state’s residents.

Nealy Cox is quoted in the DoJ news release as saying:

“Мy 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.”

Rice, in the case of AriseBank, falsely claimed that the bank could offer customers “FDIC-insured accounts and traditional banking services, including Visa-brand credit and debit cards, in addition to cryptocurrency services.”

The attorney has cleared up, that Rice was not authorized to offer banking services in Texas, and he had no access to FDIC insurance, and the partnership with Visa was also fabricated.

If found guilty, Rice could be sentenced to 120 years in prison.

(Read about: Can Cryptocurrency Scams Be Stopped?)

Sumedha Bose

Sumedha uses words as her crutch to get by in life. She takes a keen interest in debating, dancing and destroying the patriarchy in her free time. She can be contacted at [email protected].

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