The CEO of a digital currency scam that allegedly duped $4 million from investors has been sentenced to five years behind bars. Jared Rice, the founder of AriseCoin, was arrested in 2018 for defrauding investors into believing he had founded the world’s first decentralized banking platform.
In a press release by the U.S. Department of Justice, Prerak Shah, the Acting Attorney for the Northern District of Texas, announced the sentencing of the 33-year-old on August 25.
Rice was arrested in November 2018 by the FBI while he was serving as the CEO of the fraudulent firm. He was charged with three counts of wire fraud and three counts of securities fraud. Rice had earlier run-in with U.S. authorities, particularly the U.S. Securities and Exchange Commission, which sued him a year earlier for fraud and illegally issuing securities.
Following this plea, he has now been sentenced to a jail term and ordered to pay $4,258,073 in restitution by U.S. District Judge Ed Kinkeade.
In his 2019 plea, Rice admitted to lying to potential investors and claiming that AriseBank was the world’s “first decentralized banking platform.” He claimed that AriseBank could offer FDIC-insured accounts and all the other traditional banking services, including issuing Visa credit cards. It would also provide digital currency services, with all these services powered by a proprietary digital currency—AriseCoin.
However, as he raised funds from investors and promised them great returns, he “quietly converted investor funds for his own personal use, spending the money on hotels, food, transportation, a family law attorney, and even a guardian ad litem – facts he failed to disclose to investors.”
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