By: @onecoin (dWeb Governance Member)
Peeps is the creation of Jared Rice Sr. and has a story like no other tech company in existence. It is important for one to understand why this vision was created, where it came to fruition and how Peeps has finally arisen from the ashes.
## The Beginnings
Before the project was known as Peeps, it was another project promoted to millions of people around the world under the name “AriseBank”, which was originally bootstrapped by the efforts of Jared Rice Sr. and Stanley Ford. Rice’s vision was to create a decentralized banking system around cryptocurrencies like Bitcoin where users of the system could be their own bank. He publicly denounced the Federal Reserve Bank for their hidden taxation of hard-working Americans through their printing of what he referred to as the “worthless” fiat-based U.S. Dollar and spoke out about corruption he said lived deep within the U.S. Government. Little did he know however, that those at the Federal Reserve Bank, as well as its federal and state-based partner agencies — the Securities and Exchange Commission (SEC) and Texas Department of Banking respectively — were conducting a campaign to frame Rice as a fraud. In any event, looking back at Rice’s motivations at the time, him knowing about the campaign would’ve done little to slow him down.
At this time, the development of AriseBank was long from being finished but there had been a great amount of work put into the project (still online at github.com/arisebank) and Rice had secured endorsements from the likes of Evander Holyfield, and many others in what Rice dubbed “The Fight Of The Century”. In the weeks that followed, Rice sold a new cryptocurrency known as “AriseCoin” to help fund the development of the AriseBank project, in the process raising millions of dollars from many in the crypto community in a short period of time.
## The Power Of A Word
On January 5th, 2018, after Rice had sold millions of dollars worth of AriseCoin, the Texas Department of Banking served Rice and his attorneys a cease and desist letter, demanding Rice remove the word “bank” from his literature, saying that many people were driving to Dallas looking for his bank and were unable to find a branch. Rice responded with a public letter refusing to remove the word “bank” and explained that AriseBank wasn’t a traditional bank, rather it was just as the AriseBank’s website stated: “the world’s first decentralized cryptocurrency bank”. Behind the scenes however, Rice knew that none of his contributors, who were mostly crypto-savvy, would be driving to Dallas looking for a crypto bank. They all knew it was simply software and it was still under development.
Rice also explained in his letter, that AriseBank was merely a concept, that it was never going to be owned or controlled by anyone and that it was never going to function like a traditional bank or be FDIC-insured. He wasn’t hesitant to mention that our country’s founders despised a central fiat-based banking system. He even went on to say that he was ready to march on Austin, Texas and “protest the highly fraudulent banking system that the “Texas Department of Banking was protecting and shielding from a decentralized alternative.” Rice believed it was his right to build a better banking system and it was those words that prompted federal and state authorities to conspire against Rice. At the same time, the SEC was busy trying to convince the courts that cryptocurrencies were in fact investments (like stocks) and not currencies — and were doing a damn good job of it.
## The Setup
Over the course of the next few weeks, Rice was approached by a man who told him that he could purchase an FDIC-insured bank from some friends of his, in exchange for cryptocurrency. The man, known in federal documents as “E.T.” explained to Rice that it would allow him to legally use the word “bank.” E.T. also introduced Rice to a PR firm that he claimed could promote the purchase of the FDIC bank to a global audience. Rice took the bait and sent the initial down payment in cryptocurrency to a man named Kurt Matthews to begin the acquisition of KFMC Bank. Matthews assured Rice that KFMC was indeed FDIC-insured. Rice requested that Matthews provide a signed letter to his community of contributors stating that KFMC was indeed FDIC-insured and Matthews sent the email to Rice from his “harvard.edu” email address. Days later, Matthews gave Rice permission to speak about the pending acquisition and shortly after the new PR firm sent out the first press release that was supposed to announce the pending purchase.
Rice noticed the morning of the release that there were many errors, such as AriseBank being called an FDIC-insured bank, a quote from Rice stating that AriseBank offered FDIC-insured accounts and that AriseBank held 100% equity in KFMC Bank. Rice immediately contacted the PR firm and forced them to issue a correction which was released 48 hours later. The correction made clear, just as Rice’s public letter to the Texas Department of Banking had made clear weeks before, that AriseBank was simply a decentralized cryptocurrency banking software, that it wasn’t owned by anyone, would never be FDIC-insured and would never offer FDIC-insured accounts. Rice also stated that they were only in the process of acquiring an FDIC-insured bank that had little to do with the software, did not hold 100% equity in the bank and the acquisition had nothing to do with the AriseBank software. This goes without mentioning that the fund raising efforts around AriseBank were coming to an end just 3 days from the date of the correction and that 97% of the funds raised came before this press release was ever publicized. Regardless, Rice openly offered contributors refunds and most of the contributors we interviewed, recalled the day Rice refunded members of the community. During all of this, while Rice was busy offering refunds to his community of contributors, the federal and state agencies conspiring against him had already set the wheels in motion for his eventual downfall.
## The Raid
On January 25th, 2018, under seal in the Northern District of Texas, the SEC filed a lawsuit against AriseBank, Rice and Ford (SEC v. AriseBank), in which the SEC accused Rice of selling unregistered securities and making misleading statements to “investors”. The following morning, Rice was raided by what he described as “an armed militia”, made up of members of the FBI, SEC, and DOJ, carrying automatic firearms and crowd control shields. Agents made clear that the bank Rice was in the process of acquiring was not FDIC-insured and regardless of his knowledge of that fact or his intentions, he had misled investors. The government asked Rice to cooperate and hand over the many cryptocurrency wallets that held the Bitcoin, Litecoin, Ethereum and BitShares that Rice had raised in exchange for AriseCoin and Rice agreed to provide the keys to the accounts. Hours later, Rice and some of the AriseBank team were left stranded without a car, deep in the Texas country without phones, money, or food on a cold January night. By the grace of God, Rice’s Uber driver came back looking for him and was able to provide Rice and his team a ride back to Dallas, where he vowed to make a comeback and fight the allegations against him.
## The Comeback
Upon his return to Dallas, Rice found himself all over the national media portrayed as a “fraud”. Most of his work on AriseBank had been taken offline as if it had never existed and a custody battle was ensuing over his youngest son, all at once. Later that night Rice appeared on Coast-to-Coast, a nationally syndicated radio talk show, where he defiantly stated on The Crypto Connie Show “they can take my personal belongings, my reputation and even my kids, but they’ll never take my vision.” This statement created a growing movement around Rice that became known as the “Arise Army”. He publicly vowed that as long as he remained a free man, that he’d find a way to rebuild AriseBank so that it would never be seized or removed from the web again.
## The Birth Of ARISEN & The dWeb.
For the next 10 months, Rice remained a free man during the civil proceedings with the SEC and worked from his parent’s home in East Dallas, most of it in 72 hour sessions without a single minute of sleep, where he was researching and developing ways to create a truly decentralized web. “I literally sat on my parent’s back porch for days on end, simply trying to deliver on what I promised to all of the people who supported my ideas. That was really my only goal and even sleep wasn’t going to get in the way of that”, said Rice. After 9 months of research and development, Rice announced the launch of the “ARISEN” network and the “dweb://” protocol. Together, these systems formed what Rice called the world’s first truly decentralized web and a platform for developing truly decentralized applications. “I remember telling my parents that I was about to launch an alternative to the World Wide Web and I don’t think they had a single clue what I was talking about, nor did anyone for that matter”, he said. Rice ended up using software from multiple open source projects to create the dWeb whose developers were no fans of Rice. “They hated me — they hated that I was forking their projects. People really turned against me during that time period but it was the original AriseBank contributors who really had my back all the way through”, he continued.
In an early white-paper about ARISEN and dWeb, Rice acknowledged that AriseBank, due to its ability to be seized and taken offline, was not truly decentralized and that there were many things he had wrong in his original plans. “One thing is for certain, failure is one of the most crucial periods during the process of inventing something. Without it, you’ll never fully figure things out. Most innovators fail and simply start over. I failed and went to prison”, said Rice. Rice explained that once ARISEN and dWeb were launched, that a truly decentralized banking platform, along with many other decentralized systems could be developed and would disrupt nearly every industry in existence. Rice went back to the original AriseBank chat room, where ARISEN was supposed to launch the following day, to announce his comeback. Little did he know, the FBI and DOJ were still following these chat rooms. The next morning, as Rice was checking in with his probation officer, he was arrested by FBI agents and the launch of ARISEN and the dWeb were postponed indefinitely. “I remember being carried out of the probation office in handcuffs. It was the most incredible moment. I was depressed but then again, I was so motivated. Here I was, almost there again — and I failed, again. Back the drawing board I went. I’ve never been so motivated”, he said.
## The Indictment & Bond Denial.
Rice was subsequently indicted on six counts of securities fraud. According to transcripts from his bond hearing, prosecutors argued that he was a danger to society and as a result, he was held without bond. Despite Rice’s knowledge, he was being indicted for weeks. And even though he was unable to drive a motor vehicle and his passport had been suspended earlier in the year by a federal judge, he was still deemed a flight risk. “I would have never ran but I understood the government’s position. In truth, I wouldn’t trade it for anything. The experience of going to prison and building this from a prison, was a true test of my character, my abilities and how bad I truly wanted to be successful”, he said. During the hearing, a prosecutor cross-examined an FBI agent, who told the court that they believed Rice had “millions of dollars” hidden — false information they obtained from the mother of his child, who at the time was still vying for custody of their 5 year old son. Regardless of Rice’s attorney pointing out many holes in the false statements of the prosecutor and FBI, Rice was held without bond and sent to a federal holding facility.
## The Plea Agreement
Weeks before the raid and nearly eleven months before the indictment and arrest of Rice, a secret governance was established around his work. The governance was made up of 21 witnesses, many of whom were prominent BitShares community members. The governance would ultimately be entrusted with carrying on Rice’s work in the event he was incarcerated or incapable of carrying on with the projects.
The ARISEN and dWeb projects were immediately placed under the protection of the governance and safeguarded by its members until plans could be made around their continued development and launch. From behind bars, Rice continued preaching the importance of decentralization to the community from a segregated jail cell: a cell he found himself in after threats were made on his life by another inmate. As the debate on how to push forward with Rice’s work continued, he was busy writing code on notebook paper and continuing on with development, even without access to a computer.
According to a DOJ press release at the time, Rice was facing 120 years in federal prison and according to his family, the threat of an additional 100 years being tacked on by prosecutors was a major factor in his eventual choice to plead guilty. In the end, Rice elected to take a five year plea agreement. Rice’s lawyers explained to his family that in the federal system, if he plead guilty, he would be moved from the inhumane conditions of the county jail to a federal detention center where conditions were much better and where he could physically touch his family during visitation. Rice’s lawyers assured him that even though he had corrected the press release and that his intent to deliver could easily be proven to anyone with a brain, that in federal cases, the government could argue to exclude specific evidence at trial. They explained that it was their ability to exclude such evidence that could possibly end in Rice’s conviction and a possible life sentence. Rice simply wanted to live to fight another day, and in the end, he agreed to plead guilty.
## Coding Behind Bars
Members of the community assisted Rice in sending printed versions of various dWeb and ARISEN software libraries, screenshots of where he had left off on certain projects, books on programming languages that had been recently updated and even newly released programming standards so that Rice could begin the daunting task of updating dWeb and ARISEN’s software. Rice teamed with Indian programmer Shikhar Srivastava and his team of programmers to re-develop ARISEN, dWeb and a new rendition of AriseBank. For months, Rice wrote thousands of pages of code, authored seven whitepapers, and refined his vision for a company that would come to be known as “Peeps”. “I would write so much, that my wrist would literally stop functioning for a period of time. There were days where I had to have my wrist massaged multiple times and in some instances, I even had to ice my wrist. It was like I had pitched 9 innings in a baseball game”, said Rice. With nothing but a text box to type in, Rice sent emails to Srivastava over the prison’s messaging system. In fact, Rice spent most of his days writing in his cell and walking to the computer lab to send what he had written to Srivastava. “He easily spent hours every day on the computer. Inmates were walking up behind him wondering what in the world he was typing. It was code”, said Jeff Fuller, a detainee that served time with Rice. “I’m pretty sure nobody has launched software from a jail or even attempted to achieve such a feat. That in and of itself is revolutionary”, he continued.
## Launching During A Pandemic
As Rice was readying the launch of Peeps, the COVID-19 pandemic hit the United States, as well as the Bureau of Prisons. Inmates were locked down to their cells and only allowed a small amount of time to make phone calls, send emails and take a shower. Rice elected to take a shower in his sink for months and instead used the precious time out of his cell to type and send instructions to Srivastava. “I worked hard and sacrificed even phone calls to my family during that period — it was crucial that we reached the finish line this time”, said Rice. Despite the restrictions, Rice and Srivastava were able to successfully release ARISEN and the dWeb’s key infrastructure on July 4th, 2020, ultimately launching the world’s first truly decentralized web. “That was an awesome day. We were fighting to launch on the 4th because it was so reminiscent of what the dWeb’s about — freedom. It was an amazing achievement, especially with the pandemic restrictions that most inmates were under”, said Rice. “If you can launch something in these conditions, you can do anything from anywhere. Having to type this in a computer lab around hundreds of people yelling at the top of their lungs is no easy task. Those who think it’s easy, simply haven’t ever been in this kind of environment and I hope they never end up in a place like this. Attempting to concentrate around terrorists, child molestors and what seems like constant violence, is no easy task. Simply surviving in this environment is hard enough for most, imagine inventing something from here. I think it’s our single greatest achievement and I’m definitely proud of what we have achieved thus far — it’s a major milestone”, he said.
## The Peeps Mission
Peeps, as a company, overcame huge obstacles in the process of bringing their vision to the world. In the end, all Rice cared about was that his vision was brought to life and that his work, perseverance and sacrifices would provide a foundation that he and other developers could build upon for years to come. His efforts are now being realized by many developers like Srivastava and a team is growing around his vision to decentralize the world. Rice’s climb out of hell and his mission to provide freedom to others, even while his own freedom had been taken, serves as an example of the many sacrifices Peeps developers make on a daily basis to bring freedom back to the Internet. AriseCoin is now known as RISE (RIX) and this time, is being given away for free to people around the world rather than being sold. As a result, RIX has become an instrumental tool in developing a decentralized economy around the Peeps ecosystem including apps like dWallet, dSocial, dRide, dBuy and many others. At Peeps “decentralize everything” is not just a slogan — it’s their way of life and one they will strive to achieve, regardless of the obstacles in their way. It’s simply apart of their DNA.