The chief executive of blockchain startup AriseBank is now facing 20 years in prison after pleading guilty to hoodwinking over $4.2 million from investors, Finance Magnates reported March 21.
Months following the arrest and indictment of AriseBank CEO Jared Rice in November over securities and wire fraud charges, Rice eventually confessed to his illicit activity, as indicated in a recent announcement published by the U.S. Attorney for the Northern District of Texas, Erin Nealy Cox.
As detailed in the release, Rice previously made false claims that AriseBank offers “FDIC-insured accounts and traditional banking services, including Visa-brand credit and debit cards, in addition to cryptocurrency services.”
According to the report, Rice was indicted for one count of securities fraud over misleading investors during AriseBank’s operations, to which the defendant subsequently pled guilty. As for the combined counts, Rice has now been sentenced to a maximum of 20 years in prison.
As the report further indicated, AriseBank managed to defraud multiple investors, amassing over $4,250,000, which the defendant may now have to indemnify. The court is now set to resume hearing in July where Rice will appear for sentencing.
Citing the Attorney’s office, the report quoted:
“Given the fairly recent emergence of cryptocurrency, Rice’s guilty plea is one of the first of its kind in the U.S.”
In December, a U.S. federal court had also slapped a $2.7 million fine to both Rise and AriseBank’s former COO Stanley Ford to settle legal charges involving the platform’s fraudulent initial coin offerings (ICO).
Months leading to Rice’s arrest, Texas Banking Commissioner Charles G. Cooper had already issued a cease-and-desist order against AriseBank, restricting the firm from operating within the jurisdiction. As detailed in the order, AriseBank had not secured the required authorization to provide banking services in the territory.