The Texas Securities Commissioner has issued an emergency cease-and-desist order against Arkbit Capital and related entities, accusing them of operating a fraudulent multi-level marketing (MLM) scheme involving cloud mining cryptocurrency.
The order alleges Arkbit offered unrealistic daily returns of up to 1.6-2.8% for investments in its cloud mining operation for 120 days. The company reportedly used deceptive marketing tactics on social media platforms like Facebook, Instagram, and Twitter, including fake videos purporting to show its data centers and executives at industry conferences.
Additionally, the order determined that CoinPayments.Net was being utilized to process payments for the Arkbit website. The order specifies that the account holder for the Arkbit CoinPayments account is Paras Khivesara, based in Hyderabad, India.
The order alleges that Arkbit even registered as a business entity with the Arkansas Secretary of State office to enhance its appearance as a legitimate business entity online.
“Investors are well served by healthy skepticism when unfamiliar persons offer lucrative investment opportunities,” said Texas Securities Commissioner Travis J. Iles. “Savvy fraudsters are evolving, and their methods are becoming more difficult to discern from legitimate enterprises.”
The Texas State Securities Board warns investors to be cautious of investment opportunities advertised on social media and to thoroughly investigate before investing.
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