Texas Regulator Orders Arkbit Crypto Mining To Shut Down
The Texas State Securities Board greatly damaged a fraudulent Arkbit cryptocurrency cloud mining operation on with a May 28 cease and desist order against Arkbit Capital for engaging in deceptive practices to perpetrate an alleged investment fraud.
The order revealed that the Texas State Securities Board, led by Financial Examiner Alexis Cantrell, uncovered Arkbit’s false claims of operating data centers in Arkansas for cloud mining various cryptocurrencies.
Arkbit falsely promised investors daily returns of 1.6% to 2.8% for 120 days on crypto deposits ranging from $50 to $49,999. Arkbit operated under the entities Arkbit Capital, Arkbit Capital Holdings, ABC Holdings LLC, and ABC Mining.
The crypto firm allegedly tricked investors using fake media assets, including one fake video of its CEO, Delmar Estabrook, speaking at a cryptocurrency conference in Austin, Texas.
State regulators found no evidence that Estabrook or Arkbit Capital ever attended the claimed event, however.
“They were peddling a cryptocurrency cloud mining fraud built on deceit and manipulation,” said Joe Rotunda, Director of the Enforcement Division at the Texas State Securities Board.
An alleged fraudster impersonating a #crypto professional being interviewed at #consensus2022 has been named in an enforcement case on the eve of @coindesk's #consensus2024.
Purported #cryptomining company #arkbit/#abcmining named in action. See below.
— Joe Rotunda (@joe_rotunda) May 28, 2024
The order further revealed that Arkbit’s payment processing was facilitated through CoinPayments.Net, even though the processor’s policy banned users from the United States.
The Arkbit CoinPayments account holder was traced to an individual in Hyderabad, India, rather than Arkansas as
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