The Texas State Securities Board has taken decisive action against Arkbit Capital for its involvement in fraudulent activities related to crypto cloud mining. In a cease and desist order issued by Financial Examiner Alexis Cantrell, it was revealed that Arkbit Capital, along with its affiliated entities, utilized deceptive manipulation techniques involving images and videos to promote their investment plans.
The order states that Arkbit Capital, Arkbit Capital Holdings, ABC Holdings LLC, and ABC Mining (collectively referred to as “Arkbit”) dishonestly claimed to operate data centers in Arkansas for the purpose of cloud mining various cryptocurrencies. They enticed investors with the promise of daily returns ranging from 1.6% to 2.8% over a period of 120 days on digital asset deposits ranging from $50 to $49,999.
Furthermore, the order alleges that Arkbit Capital used CoinPayments.Net, a payment processor, to facilitate transactions for their investment plans, despite the platform’s policy of restricting users from certain jurisdictions, including the United States. Interestingly, the holder of the Arkbit CoinPayments account was identified as Paras Khivesara, based in Hyderabad, India, rather than Arkansas.
One of the manipulated videos employed by Arkbit Capital featured their CEO and founder supposedly speaking at a cryptocurrency conference in Austin, Texas. However, the Texas State Securities Board conducted an investigation and found no evidence of Delmar Estabrook or Arkbit Capital’s presence at the said conference.
The Director of the Enforcement Division at the Texas State Securities Board, Joe Rotunda, urges the public to exercise caution and thoroughly research any investment opportunities advertised on social media platforms. This warning comes in the wake of several cryptocurrency-related Ponzi scheme cases that have surfaced in the United States in the past year.
In one such case, on March 15, the U.S. Securities and Exchange Commission (SEC) exposed a $300 million Ponzi scheme disguised as a crypto trading platform called CryptoFX, which specifically targeted crypto investors in the Latino community. Shortly after, on March 18, a New York jury convicted two individuals who acted as promoters for the now-collapsed fraudulent crypto mining and trading scheme, IcomTech.
Most recently, on April 4, Irina Dilkinska, the former head of legal and compliance for the multibillion-dollar OneCoin fraud scheme, was sentenced to four years in jail after confessing to her involvement in laundering millions of dollars.
In summary, the Texas State Securities Board’s cease and desist order against Arkbit Capital sheds light on the deceptive practices employed by the company in the realm of crypto cloud mining. It serves as a reminder for individuals to exercise caution and conduct thorough due diligence before engaging in any investment activities.