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.
When BREAKERMAG spoke with Rice in September 2018, he was expecting to be indicted at any minute in what he called “the most legendary case in crypto history.” (He ended up being arrested by the FBI in November.) At the time, he struck a defiant tone. “I came from nothing,” he said. “I grew up in the rough side of town, so I’ve got a different demeanor than most guys in this industry. I’m not taking plea deals. I’m not taking anything.”
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He spoke of waging “a spiritual war”: “It’s going to be a long fight, man. I’m probably going to be on the front page of every newspaper again in a few weeks, whenever they get a grand jury. They can indict a ham sandwich. I’m ready for it, man. It’s going to be fun.”
At the time, Rice also claimed that AriseBank wasn’t a scam, and that “a majority, if not all” of his investors “still talk to me all the time.” When he’s sentenced this summer, Rice is expected to be required to reimburse his investors.