The founder of crypto company AriseBank has pleaded guilty for scamming his investors, the U.S. Attorney for the Northern District of Texas Office wrote. Jared Rice Sr. pleaded guilty to one count of securities fraud, having defrauded $4.2 million. Rice told his investors their accounts would be insured by the Federal Deposit Insurance Corp., and they would receive Visa credit cards. However, AriseBank was not have FDIC insurance or a contract with Visa. Moreover, it didn’t even have authorization to operate in Texas. Rice admitted to having spent the money.
According to the U.S. Attorney for the Northern District of Texas Office, “His plea makes this case one of the first in which an individual has pleaded guilty to securities fraud involving a cryptocurrency in U.S. federal court.”