An online cryptocurrency arbitrage company has been ordered to cease and desist selling unregistered securities in Arkansas.
The Arkansas Securities Department filed the cease and desist order against Arbirate, a limited liability company that is registered with the Arkansas Secretary of State’s office and reports its address as 4077 Elm Springs Road in Springdale. However, the company has reportedly never registered with the Arkansas Securities Department.
According to the Securities Department order, Aribrate claims to “boosts profits of investors by finding the most profitable cryptocurrency combinations on the exchanges.” The company claims to use a proprietary AI-based bot that collects data from more than 20 cryptocurrency exchanges to process investments.
Aribrate also guarantees a six percent daily return on vestment through its services.
However, a Securities Department investigation found that the company was not licensed by any state or federal authority to conduct activities involving securities. In addition, the investigation revealed that Aribrate was not located at the Springdale address listed with the Secretary of State’s office.
“We are beginning to see more and more of these cryptocurrency websites pop up trying to entice Arkansas and the public to invest in their companies,” Commissioner Eric Munson said in a statement. “These companies are using websites that look legitimate and legal, while offering promises of high returns on your investment. Do not be afraid to ask questions regarding the legitimacy and registration of a company before you invest. When in doubt, call the Arkansas Securities Department.”
The cease-and-desist order held that Arbirate made “false and misleading statements of material facts” and omissions in regards to guaranteed returns on investments, that the company was licensed as a securities business, that the business was located in Springdale and that investors would receive immediate income.
Under the order, Arbirate must cease operating as a broker dealer until it is “properly registered or shown to be except from registration…” and must refrain from “soliciting, offering or selling securities in the state of Arkansas” until the securities are properly registered.