Assumed cryptocurrency CEO accused of stealing $ 4 million from investors 29/11/2018


Jared Rice, the CEO of AriseBank, a company that claimed to have raised $ 600 million in a first coin offering as part of an effort to "revolutionize the banking sector" using cryptocurrency, is now facing accusations that it has stolen more than $ 4 million from investors of society.

Laughter is already facing accusations from the Securities and Exchange Commission, which interrupted the AriseBank scheme in January.

And now, Rice is facing new accusations brought by United States Attorney's Office.

According to the US Attorney's office for the Northern District of Texas, Rice used AriseBank to defraud investors on $ 4.25 million, which he would use for his personal gain.

Rice has been arrested since Federal Bureau of Investigation Wednesday and charged with three counts of fraud in securities and three counts of telegraphic fraud.

According to court documents, Rice lied to investors about AriseBank, which was announced as the "world's first decentralized banking platform".

The marketing materials of the company stated that AriseBank was built on "one of the largest cryptocurrency platforms ever built" and is "focused on bringing cryptocurrency to the average consumer and using it to revolutionize the banking sector".

The SEC previously stated that AriseBank claimed to be a "decentralized, peer-to-peer banking platform that allows users of its software to serve as their own bank," which "offers people the freedom to hold, send, receive, buy, sell and spend cryptocurrency directly from their computer or mobile device. "

All this had to be based on a proprietary digital currency called AriseCoin, which would allow the company to offer consumers FDIC– insured accounts and traditional banking services, included Visa– credit and debit cards, in addition to cryptocurrency services.

But none of these was true, according to the United States attorney's office.

In fact, AriseBank had not been authorized to carry out banking activities in Texas, where it was based, was not insured by the FDIC and had no partnership with Visa.

According to the SEC, AriseBank began raising funds in November 2017 by launching an "initial coin offering" for AriseCoin. Through an ICO, a company raises money by offering a "coin" or a "token" in exchange for other cryptocurrencies or legal currencies.

The company allowed investors to buy AriseCoin using a variety of virtual currencies, including Ethereum, Bitcoin, Litecoin, Dogecoin and NEM.

According to court documents, Rice falsely claimed that AriseBank's initial offer of coins raised $ 600 million and also concealed the fact that he previously pleaded guilty to criminal charges involving another business scheme connected to the Internet.

During the ICO trial, AriseBank also signed an agreement with former heavyweight champion Evander Holyfield to approve the company.

Holyfield tweeted the approval from his official Twitter account on January 4, 2018, inviting his 268,000 followers to "join the biggest battle in history".

During ICO, investors used digital currencies such as Bitcoin, Ethereum, Litecoin and fiat currency to buy AriseCoin.

Rice would then take over $ 4 million of those funds to use for herself, spending money on hotels, food, clothes, a family lawyer and a watchman ad litem, a court-appointed watchman who usually used to watch a child during divorce proceedings.

Rice now faces six full offices, beyond the previous SEC action against him. If convicted of the federal prosecution, Rice risks up to 120 years in the federal prison.

"My office is committed to enforcing the rule of law in the cryptocurrency space," said the US attorney for the Northern District of Texas, Erin Nealy Cox. "The northern district of Texas will not tolerate this kind of flagrant deception – online or offline."

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