CCN previously reported on the arrest and murky background of Jared Rice, Sr., the “CEO” of the AriseBank ICO scheme which saw him lining his pockets and paying personal expenses out of raised funds in the extreme.
Yesterday afternoon, the SEC announced that it had reached a settlement with Rice as regards its part of his legal troubles. A total of just over $2.5 million will be paid out by Rice and his COO, Stanley Ford. This figure includes almost $185,000 in penalties as well as over $68,000 in pre-judgement interest.
The SEC’s press release described the actions of Rice in typical government fashion, without much description or fanfare, saying they were guilty of defrauding people “by depicting AriseBank as a first-of-its-kind decentralized bank offering a variety of services to retail investors.” The director of the SEC’s Fort Worth Regional Office, Shamoil Shipchandler, had a bit more to add:
Rice and Ford lied to AriseBank’s investors by pitching the company as a first-of-its kind decentralized bank offering its own cryptocurrency for customer products and services.
Banned From ICOs and Public Companies For Life
Regardless of the outcome of the criminal case that was brought against Rice in November, he is forever barred from serving in an officer or director capacity at any public company, putting an upper limit on whatever sort of career he might have thought of having outside of criminal activity. Both him and Ford are barred from this as well as “participating in a digital currency offering.” The term is vague enough to imply that they’re not even allowed to buy ICOs. As part of the settlement, the SEC wants them totally out of the game.
For some, this last bit might seem like a case of government overreach. But the fact is that many ICOs engage their community to help them both raise funds and spread the word. Someone with Rice’s particular set of skills could potentially do harm just by having access to a referral code. What is interesting about this case for cryptonaughts is the role the SEC is playing in legitimately protecting people from bad actors, flexing their considerable muscle in ways that take admitted thieves and scammers out of the picture.
As a variety of privately funded financial products, ICOs and cryptocurrencies in generally don’t have nearly the authority or ability necessary to effectively limit scam activity. That the government is actively working to punish fraudsters is a newer paradigm in the history of cryptocurrency and speaks to its increasing legitimacy and mainstream nature.
Rice still has an ongoing criminal case, wherein the US District Attorney in Dallas sent the FBI to arrest him and charged him with fraud a couple weeks back. The outcome of that case could see him do some prison time before he is ever able to begin repaying all the fines and costs he’s incurred in the AriseBank fiasco.
Featured image from Shutterstock. Mugshot from Arrests.org.