Jared Rice Sr., cofounder and former CEO of crypto startup AriseBank, pleaded guilty to one count of securities fraud in federal court on Wednesday afternoon. Prosecutors say Rise, 30, duped investors out of $4.25 million, using the money for a variety of personal and legal expenses. Under the terms of the agreement, Rice would spend 60 months in prison. However, should a judge rule differently during sentencing in July, he could go away for up to 20 years.
An outspoken character, Rice admitted to lying to potential investors in AriseBank, which had its own cryptocurrency, AriseCoin, and billed itself as the world’s “first decentralized banking platform.” Rice falsely claimed that AriseBank, which was officially endorsed by former heavyweight boxing champion Evander Holyfield, could offer FDIC-insured accounts and banking services like Visa credit cards. Rice settled a civil action involving AriseCoin filed by the SEC last year.