After Larry Dean Harmon, who pleaded guilty to laundering $300 million, it’s Jared Rice’s turn to confess his fraud. The creator of a cryptocurrency called AriseCoin has been sentenced to five years in prison. He pleaded guilty to defrauding his investors of more than $4 million.
Eyes bigger than their stomachs
Jared Rice, 33, was sentenced to 5 years in federal prison in Texas. He was the creator of the cryptocurrency AriseCoin and CEO of AriseBank, which he described as the “world’s first decentralized banking platform”(SPOILER ALERT: it was wrong).
U.S. District Judge Ed Kinkeade ordered him to pay back the full $4.25 million to compensate every user of his “exchange.”
According to CoinDesk, he admitted to lying to investors that the AriseBank platform could provide consumers with accounts insured by VISA and the FDIC – Federal Deposit Insurance Corporation, an independent agency of the US government whose primary responsibility is to guarantee bank deposits made in the US up to $250,000.
According to company documents, AriseBank was not licensed to provide banking services in Texas; it was also not insured by the FDIC and did not have any kind of partnership with Visa.
Another 2017 ICO in the dock
Defense attorneys showed that J. Rice was actually spending investor funds on personal use, including his lawyers, hotels and travel, instead of investing the money in AriseBank.
According to court documents, the AriseCoin inventor also failed to disclose to investors his previous conviction related to a previous scam/”Internet-related business venture,” which is absolutely mandatory in the United States.
This case is one of the latest examples of authorities cracking down on rogue crypto project inventors, many of which were launched during the ICO – Initial coin offering boom of 2017. Recently, the forgotten ICO giant, Block.one of 2017 was negotiating its future in court – $27.5 million to get out of trouble?
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