Jared Rice Sr, creator of “AriseBank” and the associated cryptocurrency/token “AriseCoin,” has pleaded guilty to one count of securities fraud in Texas, Dallas News reports.
The plea reportedly involved Rice admitting that he lied to investors when he raised money for his project.
These lies included claims the project was FDIC-insured and had secured a partnership with Visa.
In fact, AriseBank was not licensed to provide money services in Texas and had no depositors’ insurance.
As well, no agreement with Visa was in place.
AriseBank and AriseCoin were both heavily promoted in late 2017 and early 2018 when Rice allegedly claimed in press releases and online communications that the project had raised $600 million USD from investors.
This was later proven false, though the AriseBank fundraise likely gained traction when it was endorsed on Twitter by champion boxer Evander Hollyfield:
When charges against Rice were announced by the U.S. Attorney’s Office Northern District of Texas in November 2018, the press release from law enforcement stated that Rice, 30, was facing up to 120 years in prison.
The same release alleged, “Rice quietly converted investor funds for his own personal use, spending the money on hotels, food, clothing, a family law attorney, and even a guardian ad litem.”
Dallas News says Rice was arrested by the FBI last November and was charged with three counts of securities and wire fraud then.
The news outlet also states that Rice now faces 0-20 years in prison.
Rice also reportedly settled a civil suit with SEC last year, and agreed to pay back $2.7 million USD to investors.
Rice’s sentencing in the criminal case is scheduled for July 11th.