Jared Rice Sr., the inventor of cryptocurrency AriseCoin was on Wednesday sentenced to five years in federal prison for scamming investors more than $4.25 million.
He was sentenced by the U.S. District Judge Ed Kinkeade, who ordered him to pay $4,258,073 in restitution.
The money was spent by investors to acquire AriseCoin, using digital currencies like Bitcoin, Ethereum, and Litecoin, as well as fiat currency.
Rice, who is also the CEO of AriseBank (self-described as the world’s “first decentralized banking platform,”) admitted to lying to investors that AriseBank platform could provide FDIC-insured accounts to consumers as well as traditional banking services such as Visa-brand credit cards.
However, AriseBank was not authorized to conduct banking in Texas, it was not FDIC insured, and was not in any form of partnership with Visa.
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Rice who was arrested in 2018, spent the funds received from investors on personal items, including hotels, family law attorney, and travel instead of investing in AriseBank, according to the Department of Justice.
He pleaded guilty to one count of securities fraud in March 2019. He also failed to disclose that he’d plead guilty to state felony charges in connection with a prior internet-related business scheme.
Last year he settled a civil action involving AriseCoin filed by the SEC’s Fort Worth regional office.
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.
