The Texas State Securities Board has taken action against Arkbit Capital, issuing a cease and desist order for its involvement in alleged fraudulent crypto cloud mining activities. Led by Financial Examiner Alexis Cantrell, the board's investigation revealed purported deceptive practices by Arkbit Capital and its associated entities.
Allegations of Deceptive Practices
Among the accusations, Arkbit Capital stands accused of employing deceptive image and video manipulation tactics to promote its investment offerings. The company, along with its affiliates Arkbit Capital Holdings, ABC Holdings LLC, and ABC Mining, allegedly misrepresented its operations, claiming to run Arkansas-based data centres for cryptocurrency cloud mining.
Investors were enticed with promises of significant daily returns ranging from 1.6% to 2.8% over a 120-day period on digital asset deposits within a specific range. However, the board's order asserts that these promises were unfounded.
Furthermore, Arkbit Capital purportedly used CoinPayments.Net, a payment processor, to handle transactions for its investment plans, despite restrictions barring users from certain jurisdictions, including the United States. It was discovered that the account holder linked to Arkbit's CoinPayments account was Paras Khivesara, located in Hyderabad, India, rather than in Arkansas as claimed.
Additionally, the board highlighted instances of manipulated media, including a video purportedly featuring the company's CEO and founder speaking at a cryptocurrency conference in Austin, Texas. However, no evidence was found to support the presence of Delmar Estabrook or Arkbit Capital at the said event.
Official Highlights Risks
In response to these findings, Joe Rotunda, Director of the Enforcement Division at the Texas State Securities Board, emphasized the importance of vigilance when encountering social media investment opportunities.
“This is a common tactic we see in online crypto investment scams. By appearing to be part of the cryptocurrency industry, bad actors attempt to seem like legitimate contributors to the space. Don’t be fooled,” said Rotunda.
This incident adds to a series of Ponzi scheme cases involving cryptocurrency that have surfaced in the United States over the past year, reflecting challenges within the digital asset investment landscape.
