The CEO of a crypto bank has been arrested by the FBI for a fraud of over $4 million which is generated through Initial Coin Offerings of the bank.
Jared Rice Sr., the CEO of the AriseBank, on the defrauding case of raising $4 million with AriseBank’s Initial Coin Offerings, has been arrested, announced by the United States Attorney’s Office of North District of Texas, November 29. The charges involved three counts of securities and wire fraud.
AriseBank is the world’s first ever decentralized banking platform, as claimed by the CEO of the bank. As per the claims, the AriseBank would soon offer debit and credit cards linked with Visa, and FDIC insured bank accounts, adding to its own tokens. However, the bank was not able to offer the things mentioned, also it doesn’t have the required authorization to establish a business in Texas.
Startup – A Multi-Million Project
As per the CEO of AriseBank, the start-up has raised over $600 million funds in just a matter of few weeks. Along with it, he was spending the cash of the investors on hotels, clothes, and food.
In June 2017, Rice was able to offer AriseCoin – Bank’s coins and started promoting it with the help of social media and its company’s website. This way of endorsing the coins helped him in getting hundred of investors and then ultimately helped in generating over millions of dollars’ of capital. The CEO of AriseBank, if convicted, will see his next 120 years in jail.
Illegal Securities during ICOs
This is not the first time that AriseBank is under the eyes of custody, as at the beginning of 2018; SEC announced that Rice, along with his partner Stanley Ford, was under investigation for allegations of fraud through unlicensed securities with their Initial Coin Offering (ICO), and after this illegal activity, the authorities issued a desist order.
The United States Attorney for the Northern District of Texas, Erin Nealy Cox, said:
“My office is committed to enforcing the rule of law in the cryptocurrency space. Any flagrant deception, whether it is online or offline, will never be tolerated by the Northern District of Texas.”