Prosecution accuses Rice, 30, of lying to potential investors arguing that AriseBank could offer consumers FDIC insured accounts and traditional banking services, including Visa credit and debit cards, as well as cryptocurrency services. He called it "the first decentralized banking platform" based on a proprietary digital currency called AriseCoin.
AriseBank had no such authorization to conduct banking activities in Texas, had no FDIC insurance and had no partnership with Visa, according to the indictment.
Since Rice has publicized the non-existent benefits of AriseBank in press releases and online, government prosecutors have converted funds for investors for personal use, including hotels, food, clothing, jousting Uber, a family lawyer and a guardian. They also claim that he spent some of his money on his girlfriend.
Rice raised $ 4.25 million from investors using digital currencies such as Bitcoin, Ethereum and Litecoin between June 2017 and January, the prosecution said. Investors thought they were buying an AriseCoin, as it was still released.
"My office is committed to enforcing the rule of law in the cryptocurrency space," said Nealy Cox, the US lawyer.
Laughter risks up to 120 years in the federal prison if convicted of all six counts.