The Texas State Securities Board has swiftly intervened to shut down Arkbit Capital, exposing a fraudulent crypto cloud mining scheme that deceived investors with false promises and manipulated media.
Arkbit falsely claimed to operate data centers in Arkansas for cryptocurrency cloud mining, luring investors with promises of daily returns.
Deceptive Practices Exposed
Financial Examiner Alexis Cantrell discovered Arkbit’s deceitful practices. The company used CoinPayments.net to facilitate transactions despite platform restrictions on users from the US. These accounts were linked to Paras Khivesara in Hyderabad, India.
Arkbit published manipulated videos and images on social media to attract investors. One video falsely depicted Arkbit’s CEO speaking at a cryptocurrency conference in Austin, Texas. However, the Texas State Securities Board found no evidence of his presence at the event.
Read more: How To Identify a Scam Crypto Project
The investigation also revealed that Arkbit used stock footage from a server plant to depict its supposed Arkansas data center and traced the video of Arkbit’s principal office to a rentable office space in Los Angeles. Joe Rotunda, Director of the Enforcement Division, highlighted the need for investor vigilance.
“Fraudsters are evolving, and their methods are becoming more sophisticated. Investors must exercise healthy skepticism when unfamiliar entities offer lucrative investment opportunities,” Rotunda said.
The Texas State Securities Board has a history of acting against fraudulent cryptocurrency schemes. In 2018, it issued an emergency cease and desist order against several Utah-based individuals and companies for unregistered cryptocurrency mining investments promising implausible returns. The board urges the public to thoroughly research any investment opportunity, especially those promoted on social media.
Read more: 15 Most Common Crypto Scams To Look Out For
Arkbit’s case is part of a more significant trend of cryptocurrency Ponzi schemes in the US. In March 2024, the SEC busted a $300 million Ponzi scheme under the guise of CryptoFX, which targeted Latino investors. Shortly after, a New York jury also convicted two individuals promoting the fake crypto mining and trading scheme IcomTech. Most recently, Irina Dilkinska, former head of legal and compliance for the OneCoin fraud scheme, was sentenced to four years for laundering millions of dollars.
The crackdown on Arkbit Capital highlights the persistent threat posed by fraudulent cryptocurrency schemes. This case serves as a stark reminder for investors to exercise caution and conduct thorough research before committing to any investment, especially those that promise high returns with minimal risk.
The post Texas Shuts Down Arkbit Capital’s Crypto Cloud Mining Fraud appeared first on BeInCrypto.
