As an analyst with a background in financial regulation and securities fraud investigation, I find the Texas State Securities Board’s Emergency Cease and Desist Order against Arkbit deeply concerning. The alleged multi-level marketing (MLM) scheme, which promised daily returns from cryptocurrency mining investments, appears to be nothing more than a sophisticated scam.
The Texas State Securities Board has taken immediate action to halt a fraudulent multi-level marketing (MLM) scheme orchestrated by Arkbit. As stated in the Emergency Cease and Desist Order, Arkbit is required to cease all investment initiatives, which allegedly promise returns derived from cryptocurrency mining investments. The entities involved in this scheme include Arkbit Capital, Arkbit Capital Holdings, ABC Holdings LLC, and ABC Mining.
Arkbit’s Payment Processor Account in India
Arkbit asserts that it manages data centers located in Arkansas for cloud mining various digital currencies. Based on Arkbit’s website information, the Standard and Complete Return of Investment (ROI) plans they provide promise daily returns ranging from 1.6% to 2.8%, over a period of 120 days. To invest under these plans, one needs to deposit cryptocurrencies valued between $50 and $59,999.
The Texas State Securities Board discovered that Arkbit Capital employed CoinPayments.Net as a means for processing investment payments from users. Notably, this payment processor’s guidelines prohibit participation from the United States and certain other regions. Surprisingly, the individual managing the CoinPayments account was identified as Paras Khivesara, residing in Hyderabad, India, instead of Arkansas as expected.
Texas Securities Board Exposes Arkbit for Doctored Images and Videos
The Texas regulatory body alleges that Arkbit deceitfully enhanced some visual materials to boost their products. For example, a video put out by Arkbit Capital depicted the company’s founder and CEO Delma Estabrook attending a 2023 cryptocurrency event in Austin, Texas. Nevertheless, no concrete proof has surfaced to corroborate Estabrook or Arkbit’s participation in the conference.
As an analyst, I’ve uncovered some intriguing information regarding Arkbit’s supposed office location. It appears that a video purportedly showing their workplace in Little Rock, Arkansas, is actually footage of a rentable office space in Los Angeles. To bolster their deception, Arkbit registered as a business entity with the Arkansas Secretary of State.
As a researcher studying Arkbit’s suspicious activities, I have uncovered evidence of their social media strategies aimed at promoting scams. The company frequently guides users towards its website and investment materials through Facebook, LinkedIn, Instagram, and another platform X. Additionally, they operate a YouTube account where they showcased supposed data centers located in Arkansas. However, the Texas Securities Board reported that Arkbit utilized “stolen and manipulated images and videos” to boost their credibility. One of these YouTube videos was discovered to be an altered stock video obtained from Pond5, depicting a crypto mining server farm.
Authorities Caution Investors
Texas Securities Commissioner Travis J. Iles urges investors to approach enticing investment propositions from unrecognized individuals with a healthy dose of skepticism. Iles cautions potential investors to be vigilant, as the tactics employed by swindlers are evolving, making it increasingly challenging to discern legitimate investments from fraudulent schemes.
Based on the statements made by Joe Rotunda, the head of the Enforcement Division at the Texas State Securities Board, it appears that the cryptocurrency industry has encountered its fair proportion of scams as per his assessment.
In the realm of digital currency investments, it’s not uncommon for swindlers to employ deceitful strategies. Masquerading as industry insiders, they strive to give an authentic impression. Be cautious and avoid being misled by such fraudulent schemes.
In July of last year, the Securities Board in the state took action against Abra and some associated businesses, alleging securities fraud. Then, in January, the Board reached a settlement with Abra, enabling investors to retrieve their investments.
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2024-05-29 16:09