📰 Table Of Contents
Texas State Securities Board Cracks Down on Arkbit Crypto Mining Scam
The Texas State Securities Board recently exposed a fraudulent Arkbit cryptocurrency cloud mining operation through a cease and desist order issued against Arkbit Capital. The order, led by Financial Examiner Alexis Cantrell, unveiled deceptive practices used by Arkbit Capital to carry out an alleged investment fraud.
Arkbit’s Deceptive Practices
- Arkbit falsely claimed to operate data centers in Arkansas for cloud mining various cryptocurrencies.
- Investors were promised daily returns of 1.6% to 2.8% for 120 days on crypto deposits ranging from $50 to $49,999.
- Arkbit operated under multiple entities including Arkbit Capital, Arkbit Capital Holdings, ABC Holdings LLC, and ABC Mining.
The fraudulent scheme involved fake media assets, such as a video featuring a fake CEO, Delmar Estabrook, speaking at a cryptocurrency conference in Austin, Texas. However, state regulators found no evidence of Estabrook or Arkbit Capital’s presence at the event.
Regulatory Action and Wider Trends
Joe Rotunda, Director of the Enforcement Division at the Texas State Securities Board, described the scheme as “built on deceit and manipulation.” The order also revealed that Arkbit’s payment processing was done through CoinPayments.Net, despite the processor’s ban on U.S. users.
This incident is part of a broader trend of alleged crypto Ponzi schemes that regulators are actively working to shut down. Recent actions by the U.S. Securities and Exchange Commission and other regulatory bodies demonstrate a commitment to protecting investors from fraudulent activities in the crypto space.
Texas Regulators’ Efforts
The Texas State Securities Board has been vigilant in combating crypto investment frauds to safeguard residents from unscrupulous actors. Previous actions, such as the emergency cease and desist order issued in 2018 against unregistered cryptocurrency mining investments, highlight the board’s commitment to investor protection.
Rotunda emphasized the importance of aggressive enforcement actions and investor education campaigns to prevent bad actors from exploiting emerging technologies for fraudulent purposes.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
