The Texas State Securities Board has taken action against Arkbit Capital for engaging in fraudulent activities related to crypto cloud mining. The Board, led by Financial Examiner Alexis Cantrell, discovered that Arkbit Capital and its affiliated entities used deceptive image and video manipulation techniques to promote their investment plans. These entities, including Arkbit Capital Holdings, ABC Holdings LLC, and ABC Mining, falsely claimed to operate data centers in Arkansas for cloud mining various cryptocurrencies.
Arkbit Capital offered investments with daily returns of 1.6-2.8% for 120 days on digital asset deposits ranging from $50 to $49,999. The cease and desist order also highlights that Arkbit Capital used CoinPayments.Net, a payment processor, to facilitate payments for their investment plans, despite the platform’s policy restricting users from certain jurisdictions, including the United States. It was discovered that the Arkbit CoinPayments account holder, Paras Khivesara, is located in Hyderabad, India, not Arkansas.
One of the manipulated videos used by Arkbit Capital featured a speech from their CEO and founder at a cryptocurrency conference in Austin, Texas. However, the Texas State Securities Board found no evidence of Delmar Estabrook or Arkbit Capital’s presence at the conference.
In response to this case, Joe Rotunda, Director of the Enforcement Division at the Texas State Securities Board, urges the public to be cautious when dealing with social media investment opportunities and advises thorough research before sending money. This incident is part of a series of Ponzi scheme cases involving cryptocurrency that have emerged in the United States in the past year.
These include the busting of a $300 million Ponzi scheme by the U.S. Securities and Exchange Commission (SEC) on March 15, disguised as a crypto trading platform called CryptoFX, which targeted Latino crypto investors. On March 18, a New York jury convicted two individuals who acted as promoters for the now-defunct fake 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, received a four-year jail sentence for her involvement in laundering millions of dollars.
In light of these cases, it is important for individuals to understand the risks associated with crypto exchanges and to research and verify investment opportunities before taking any action.