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 Cloud The cloud or cloud computing helps provides data and applications that can be accessed from nearly any location in the world so long as a stable Internet connection exists. Categorized into three cloud services, cloud computing is segmented into Software as a Service (SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS). In terms of trading, the versatility of the cloud service allows retail traders the ability to test out new trading strategies, backtest pre-existing conc The cloud or cloud computing helps provides data and applications that can be accessed from nearly any location in the world so long as a stable Internet connection exists. Categorized into three cloud services, cloud computing is segmented into Software as a Service (SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS). In terms of trading, the versatility of the cloud service allows retail traders the ability to test out new trading strategies, backtest pre-existing conc Read this Term 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.

Texas regulator orders Arkbit Capital to cease operations for alleged crypto scam

The Texas State Securities Board has issued a cease and desist order against crypto miner Arkbit Capital for engaging in fraudulent crypto cloud mining activities, Cointelegraph reported. The…

— CoinNess Global (@CoinnessGL) May 29, 2024

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 Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and Read this Term cases involving cryptocurrency that have surfaced in the United States over the past year, reflecting challenges within the digital asset investment landscape.