AriseBank, a cryptocurrency platform’s CEO has been arrested for an alleged multi-million dollar scam. The U.S. Attorney’s Office of the Northern District of Texas announced that 30-year-old Jared Rice Sr. cheated over $4 million. The suspect is charged with three counts of securities fraud and three counts of wire fraud.
The CEO lied to investors saying that the company is the first decentralized banking platform. He also said that the platform would provide DIC-insured bank accounts and Visa-linked debit and credit cards for cryptocurrency services based on its own AriseCoin token.
According to the Justice Department, AriseBank was not authorized for conducting any banking services in Texas. The project was neither FDIC insured nor had any partnership with Visa.
The CEO is also accused of raising $600 million within just a few weeks through an Initial Coin Offering (ICO) providing false statements. He spent investors’ money for his own personal use on hotels, food and clothing and more.
The Justice Department included that Mr. Rice started promoting AriseBank and AriseCoin from June 2017. The promotion was done through press releases, public video interviews, social media outlets, and his own website.
The Attorney’s Office said that if convicted, the CEO will face up to 120 years in federal prison.
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.”
The U.S. Securities and Exchange Commission (SEC) also sued Mr. Rice in January with his co-founder Stanley Ford. They were sued for issuing unregistered securities during an ICO.