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The chief executive of blockchain inauguration AriseBank is facing astir to 120 years in imprison for allegedly defrauding investors out of $ 4 million .
preferably than use the funds to create a product, the former CEO, Jared Rice, used the cash to fund a lavishness life style, paying for hotels, food, and clothes. The funds were besides allegedly used as a mean to appoint a family lawyer and a defender ad litem — otherwise known as an appointed figure in court tasked with determining a child ‘s best interests. According to US Department of Justice ( DoJ ) prosecutors, even as press releases were being released touting his startup ‘s solution, Rice was softly using investor funds for his own ends. In full, it is believed approximately $ 4 million has been stolen. CNET: Secret Facebook-FBI ruling must be made public, ACLU and EFF say AriseBank, of which the startup ‘s web site is not operational at the time of writing, claimed to be “ the first decentralized bank to offer the first base and largest cryptocurrency banking platform in the populace, ” and said its software could allow users to “ serve as their own bank. ” further legitimacy was added with claims that AriseBank, which is registered at a Texas address, was in the process of acquiring KFMC Bank Holding Company and TPMG — neither of which can be found on banking databases. Celebrities besides endorsed the inauguration.
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preferably than act as a cardinal exchange, the inauguration promised never to hold cryptocurrency funds — and alternatively would give “ people the exemption to hold, send, receive, buy, sell and spend cryptocurrency directly from their calculator or mobile device. ” See also: These are the warning signs of a fraudulent ICO That is, of course, after initial investment rounds finished. manque investors on social media suggest that cryptocurrency including Ethereum ( ETH ), Bitcoin ( BTC ), and Litecoin ( LTC ) was accepted in return key for AriseCoin, the startup ‘s own token. Rice was arrested by the FBI on Wednesday and was charged with defrauding “ hundreds ” of investors who were told that the inauguration could offer consumers FDIC-insured accounts and traditional bank services, including Visa credit and debit cards, aboard cryptocurrency transactions. Law enforcement says that in world, AriseBank had no license to facilitate bank activities in Texas, was not insured under the US Federal Deposit Insurance Act, and no deal had been struck with Visa or any other requital tease business. TechRepublic: Microsoft details the causes of its recent multi-factor authentication meltdown Rice has been indicted on three counts of securities fraud and three counts of wire fraud.
This is not the entirely case involving the executive. In January, Rice allegedly claimed AriseBank had raised $ 600 million through an Initial Coin Offering ( ICO ). Prosecutors say this was a deceitful title, and at the time, the CEO besides failed to disclose felony charges in association with a past Internet-based outline. Rice pleaded guilty to the charges. rice is besides the discipline of a civil case ( .PDF ) filed in January by the US Securities and Exchange Commission ( SEC ) relating to the ICO, together with co-founder Stanley Ford. SEC says no registration was filed for the event, and the claims of FDIC policy were false .