Arkbit Capital, a company involved in fraudulent crypto cloud mining activities, has been issued a cease and desist order by the Texas State Securities Board. The board, led by Financial Examiner Alexis Cantrell, discovered that Arkbit Capital and its affiliated entities were engaging in deceptive practices, including the manipulation of images and videos to promote their investment plans.
The fraudulent activities of Arkbit Capital, Arkbit Capital Holdings, ABC Holdings LLC, and ABC Mining (collectively known as “Arkbit”) involved false claims about operating data centers for cloud mining cryptocurrencies in Arkansas. They offered investments with daily returns of 1.6-2.8% for 120 days on digital asset deposits ranging from $50 to $49,999.
The order also revealed 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 Paras Khivesara, located in Hyderabad, India, was the account holder for Arkbit’s CoinPayments account, not someone in Arkansas as claimed.
One of the manipulated videos used by Arkbit Capital included footage that supposedly showed their CEO and founder speaking at a cryptocurrency conference in Austin, Texas. However, the Texas State Securities Board found no evidence that Delmar Estabrook or Arkbit Capital were actually present at the conference.
As a result of these findings, the Texas State Securities Board, represented by Joe Rotunda, Director of the Enforcement Division, urges the public to exercise caution when dealing with investment opportunities on social media and to thoroughly research any investment before sending money.
This case is just one example of the Ponzi scheme cases related to cryptocurrency that have emerged in the United States in the past year. In March, the U.S. Securities and Exchange Commission (SEC) uncovered a $300 million Ponzi scheme disguised as a crypto trading platform called CryptoFX, which targeted Latino crypto investors in the U.S. Shortly after, a New York jury convicted two individuals who promoted the fake crypto mining and trading scheme IcomTech, which had collapsed. Most recently, 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 incidents, it is crucial for individuals to be aware of the risks associated with crypto exchanges and thoroughly understand how their money is being handled.