Scam News

The CEO of a Dallas virtual currency firm admits duping investors over $4 million, spends it on his girlfriend

The CEO of AriseBank, a Dallas virtual currency firm, has acknowledged before the court that he stole over 4 million U.S dollars from investors in a shady investment deal.

Jared Rice Sr, the CEO, was charged in a federal court for doing business against the securities regulations. In early 2018, the Securities and Exchange Commission stopped an ongoing initial coin offering which was being conducted by AriseBank.

As reported by Dallas News, the virtual currency firm claimed to have developed a digital currency, AriseCoin, which it sold to investors promising “guaranteed, no-risk returns of up to 20 percent.” The firm accepted deposits in Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and fiat.

Court documents revealed that:

Rice promised investors they could receive accounts insured by the Federal Deposits Insurance Corp. (FDIC) and Visa-branded credit cards, despite the fact that AriseBank had not been authorized to do Business in Texas, was not FDIC-insured, and had no partnership with Visa.

Interestingly, the CEO of the virtual currency firm told the court that he used the 4.2 million U.S dollars on lawyers, Uber rides, food, his girlfriend, and a “guardian ad litem and for hotels.”

Erin Nealy Cox, United States attorney for the Northern District of Texas, while acknowledging that the CEO of the virtual currency firm is the first to plead guilty on such charges, said that dubious investment schemes whether involving cryptocurrencies “or otherwise” have to be condemned.

CoinDesk reported that:

According to his [the CEO of the virtual currency firm] plea agreement, the U.S government and Rice have agreed that the defendant should spend 60 months in prison. He faces a maximum sentence of 20 years, a $5 million fine, three years’ supervised release, restitution, and forfeiture.

Do you think crypto investors should confirm any claims and documents before signing on any investment deal?

Let us know your thoughts in the comments section below.

coinmag

Philip is an experienced blogger keen on staying updated with trends and news surrounding the blockchain and Bitcoin space. With several years of freelance experience in various industries, Philip brings his knowledge and experience into the crypto space.

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