Texas Securities Board Halts Arkbit Capital for Fraudulent Crypto Cloud Mining Activities
Summary:
The Texas State Securities Board has issued a cease and desist order to Arkbit Capital and related entities for fraudulent crypto cloud mining activities. They promised substantial returns on digital assets while deploying misleading promotional materials. Entities associated with Arkbit also illegally utilized a payment processor, despite certain jurisdiction restrictions. The board's financial examiner found no evidence of the company's claims. The board advises the public to be wary of such investment opportunities, signaling an increase in such Ponzi schemes related to cryptocurrency across the United States.
The Texas State Securities Board has enforced a cease and desist order to halt operations of Arkbit Capital for participating in deceitful crypto cloud mining. The investigation, spearheaded by Financial Examiner Alexis Cantrell, unearthed Arkbit’s fraudulent actions, which included the use of misleading imagery and video edits to boost their investment products. Institutions associated with Arkbit, namely, Arkbit Capital, Arkbit Capital Holdings, ABC Holdings LLC, and ABC Mining, dishonestly professed to run cloud mining data centers based in Arkansas for various digital currencies. They peddled investment plans with daily yield promises of 1.6-2.8% for a 120-day term on crypto asset deposits ranging from $50 to $49,999. The order further accuses Arkbit of utilizing a payment processor, CoinPayments.Net, despite the platform's restriction on users from certain regions, including the US. It has been discovered that the CoinPayments account was registered to Paras Khivesara, a resident of Hyderabad, India, rather than Arkansas. To heighten the deception, Arkbit circulated doctored videos featuring their alleged CEO, but the Board discovered no proof that Delmar Estabrook or the company attended the referenced cryptocurrency conference held in Austin, Texas. Texas State Securities Board, led by Joe Rotunda, the Enforcement Division Director, advises the public to exercise caution with online investment opportunities and requires comprehensive research before making any financial commitment. This case is one among many cryptocurrency-associated Ponzi schemes that have proliferated across the US in recent times. Notably, the U.S. Securities and Exchange Commission (SEC) recently uncovered a $300 million Ponzi scheme disguised as a crypto trading platform, CryptoFX, which manipulated Latino investors in the US. Moreover, on March 18, two promoters of the now-defunct, fraudulent crypto mining operation, IcomTech, were found guilty by a New York jury. Similarly, a four-year prison sentence was meted out to Irina Dilkinska, the ex-chief of legal and compliance for the multi-billion dollar deception, OneCoin, following her confession of money laundering involvement.
Published At
5/29/2024 1:19:23 PM
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