Jared Rice, the founder of the AriseBank Coin, has pleaded guilty to one count of securities fraud before a Federal Court in Dallas, implying that he lied to investors to collect around $4.2 million worth of cash and cryptocurrencies in a fake ICO.
According to a Dallas News report about the court case, Rice deceived hundreds of investors into swapping cash, Bitcoin, Litecoin or Ether tokens for the AriseBank cryptocurrency, AriseBank Coin.
Investors were promised 20% "guaranteed, no-risk returns" as well as ownership to Federal Deposit Insurance Corporation (FDIC) insured accounts and Visa-branded debit card for transactions.
However, the recent court documents confirmed that Rice did not have any approval from local authorities to do business in Texas. Also, he did not have any insurance from the FDIC or any partnership with card company Visa.
Erin Nealy Cox, the U.S. attorney for the Northern District of Texas who presided over Rice’s case, described it as a first-of-its-kind “flagrant deception of investors” and reiterated that authorities would not allow such fraudulent practices.
Meanwhile, the punishment for Rice’s offense will include paying back to investors the amount he extorted from them, and also a possible 20-year jail term when he returns to court for sentencing in July.
The latest development is the second high-profile court judgment against the AriseBank CEO in the space of three months. In December Stmarket.co reported that Jared Rice Sr. and another Arisebank official, Stanley Ford settled charges to the tune of $2.5 million with the U.S SEC, for selling unregistered securities.
In a more recent crypto-related crime case, we also reported that U.S authorities arrested Konstantin Ignatov and his older sister Ruja Ignatova, the founders of the OneCoin cryptocurrency.
Subscribe to our Telegram channel to stay up to date on the latest STO and crypto regulations news