The former CEO of reported cryptocurrency scam AriseBank has pleaded guilty to defrauding victims of over $4.2 million, Texas-based daily news outlet Dallas News reported March 21.
Jared Rice, whom the FBI arrested over securities and wire fraud in November last year, confessed to his activities, according to an announcement by the United States Attorney for the Northern District of Texas, Erin Nealy Cox. Rice had allegedly falsely claimed that AriseBank could offer customers “FDIC-insured accounts and traditional banking services, including Visa-brand credit and debit cards, in addition to cryptocurrency services.”
The announcement, seen by Dallas News, reportedly shows that Rice specifically entered a guilty plea for one count of securities fraud, implicating him in lying to investors of AriseBank while it operated.
As Cointelegraph reported, Rice initially faced a 120-year jail term for the combined counts, but sources now indicate the maximum term will be 20 years.
In total, AriseBank seized $4,250,000 from participants, which Rice may now have to repay in full. He will return to court for sentencing in July.
“Given the fairly recent emergence of cryptocurrency, Rice's guilty plea is one of the first of its kind in the U.S.,” Dallas News references the Attorney’s office as adding.
In December of last year, both Rice and then-AriseBank COO Stanley Ford were also ordered by a U.S. federal court to pay around $2.7 million in fines to settle charges related to reportedly fraudulent initial coin offerings (ICO) operated by AriseBank.
The scheme had received notice it was no longer welcome in its home jurisdiction of Texas months prior to Rice’s arrest.
At the time, the Texas Banking Commissioner Charles G. Cooper sent a cease and desist order to AriseBank, arguing it did not have the required permission to offer banking services to residents.
The move closely followed a similar demand by Texas regulators sent to defunct cryptocurrency scheme BitConnect, which imploded shortly afterwards.