- The Texas State Securities Board has issued a cease and desist order against Arkbit Capital for allegedly engaging in fraudulent cryptocurrency cloud mining activities.
- The order highlights the deceptive practices employed by Arkbit, including false claims of operating data centers and promising unrealistic returns to investors.
- Joe Rotunda, Director of the Enforcement Division at the Texas State Securities Board, emphasized the fraudulent nature of Arkbit’s operations, calling it a scheme built on deceit and manipulation.
The Texas State Securities Board has taken decisive action against Arkbit Capital, a company accused of perpetrating a fraudulent cryptocurrency cloud mining scheme, to protect investors from deceptive practices.
Arkbit Alleged of Fraudulent Cloud Mining Scheme
Arkbit Capital, operating under various entities, promised investors daily returns of 1.6% to 2.8% for 120 days on crypto deposits ranging from $50 to $49,999. The company allegedly used fake media assets, including a fabricated video of its CEO, Delmar Estabrook, to lure investors. State regulators found no evidence supporting Arkbit’s claims, revealing the fraudulent nature of their operations.
Deceptive Practices and Regulatory Actions
Arkbit’s payment processing was conducted through CoinPayments.Net, despite the processor’s policy banning users from the United States. The account holder was traced to an individual in Hyderabad, India, further exposing the deceitful practices. This case is part of a broader trend of crypto Ponzi schemes that regulators are actively working to dismantle.
Texas Regulators Prioritizing Investor Protection
The Texas State Securities Board’s action against Arkbit is part of an ongoing effort to combat crypto investment frauds and protect residents from unscrupulous actors. In 2018, the Board issued an emergency cease and desist order against several individuals and companies offering unregistered cryptocurrency mining investments with implausibly high returns. Such actions highlight the importance of regulatory oversight in the rapidly evolving crypto market.
Conclusion
The Texas State Securities Board’s decisive action against Arkbit Capital underscores the importance of regulatory vigilance in the cryptocurrency industry. By exposing and shutting down fraudulent schemes, regulators aim to protect investors and maintain the integrity of the financial markets. As the crypto landscape continues to evolve, ongoing efforts to educate investors and enforce regulations will be crucial in preventing future frauds.
