AriseBank CEO Arrested By FBI In $4 Million Cryptocurrency Platform Fraud
The CEO of AriseBank, a cryptocurrency company, was arrested by the FBI today, November 28. He was charged with defrauding hundreds of investors out of more than four million dollars.
Called Jared Rice Sr., the 30-year-old CEO was charged by the attorney office of the Northern District of Texas. The civil action was filed by the U. S. Securities and Exchange Commission (SEC) way back in the beginning of the year, in February. He was accused of three counts of wire fraud and another three of securities fraud for the same crypto scheme.
He had already received a cease and desist order in an emergency condition before and the bank, which described itself as a “crypto bank”, had to halt its services to any resident of the state, since it was deemed that it did not offer banking services.
One of the charges is that the CEO has falsely affirmed that the Initial Coin Offering (ICO) for AriseCoin, which was the token of AriseBank, had raised over $600 million USD when it actually did not do that.
He also did not disclosed his prior guilty plea to state felony charges in relation with another business that was unlawful by the SEC and solicited investors to buy a lot of cryptos like Ethereum (ETH), Bitcoin (BTC), fiat money and other assets.
Another claim is that he lied that the bank would be able to offer customers FDIC-insured accounts and all the services that could be provided by a normal bank, which is, again, not the truth. He was also not authorized to offer this services in Texas and had no partnership with Visa, as he claimed before.
The Whole Thing Was A Lie
The argument from the SEC is that he lied a lot about the services offered by the bank and that the combined issue is that he was not legally allowed to do what he did and also that there were so many non-existent benefits that the man could be considered liable to be arrested. At the moment, the charges can lead up to 120 year in federal prison.
The U. S. Attorney that has the case, Erin Nealy Cox, has affirmed that the office is committed to enforcing the rule of law in the crypto space and that the district will not accept any kind of deception at all.
The Texas Security Commissioner has recently sent cease and desist orders for My Crypto Mine, a mining investment company. The company was accused of selling unregistered securities and engaging in both fraud and public deception.
Many companies are currently receiving these orders from U. S. estate agencies that are trying to curb illegal ICOs and similar practices. While some cases involve fraudulent cases like this one, some of the others are mostly receiving emergency cease and desist orders because they are not regulated by the U. S. SEC.