Arkbit crypto mining MLM fraud busted by Texas regulators

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

According to the order, the Texas State Securities Board, led by Financial Examiner Alexis Cantrell, found that Arkbit Capital and its affiliated entities engaged in fraudulent activities, including the use of deceptive image and video manipulation techniques to promote their investment plans.

Arkbit Capital, Arkbit Capital Holdings, ABC Holdings LLC, and ABC Mining (collectively “Arkbit”) falsely claimed to operate Arkansas-based data centers for cloud mining various cryptocurrencies.

It offered investments with promised daily returns of 1.6-2.8% for 120 days on digital asset deposits between $50 and $49,999.

The order also alleges that Arkbit Capital used a payment processor, CoinPayments.Net, to facilitate payments for their investment plans despite CoinPayments.Net’s policy restricting users from certain jurisdictions, including the United States.

The Arkbit CoinPayments account holder was found to be Paras Khivesara, who is located in Hyderabad, India, not Arkansas.

One of the manipulated videos used by Arkbit Capital included a video 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 present at the conference.

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The Texas State Securities Board, through Joe Rotunda, Director of the Enforcement Division, urges the public to remain vigilant when dealing with social media investment opportunities and thoroughly research any investment before sending money.

This is one of several Ponzi scheme cases related to cryptocurrency that have emerged in the United States over the past year.

On March 15, the U.S. Securities and Exchange Commission (SEC) busted a $300 million Ponzi scheme under the guise of a crypto trading platform called CryptoFX , which targeted crypto investors from the Latino community in the U.S. 

A few days later, on March 18, a New York jury convicted two individuals who acted as promoters for the now-collapsed 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 after admitting to her role in laundering millions of dollars.

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