HotNews No 106: Italy Halts ArbiSmart: A Case of Effective Action Against Crypto Fraud

In Europe, what crypto platform users have long been hoping for is finally happening — regulators are beginning to actively protect investors from unregulated and risky operators. The Italian financial supervisory agency CONSOB made a decision on April 30, 2025, ordering the platform ArbiSmart to cease offering investment services to Italian residents.

How the ArbiSmart Platform Functioned

ArbiSmart, like many other similar platforms, portrayed its business as an “arbitrage investment system.” The platform used an automated system that supposedly tracked the best price differences across various crypto exchanges and executed transactions to generate profits for users. Users were invited to deposit cryptocurrency on the platform and were led to believe that profits from arbitrage would be distributed to their accounts. The platform also promised a guaranteed monthly return of up to 1% per day, which is a classic feature of Ponzi schemes.

However, ArbiSmart had no actual products or services to sell. Instead, users were encouraged to invest money in the platform itself as affiliate membership, and profits were primarily paid out from new investments made by other users, a hallmark of MLM and Ponzi systems.

Unclear Regulation and Illegitimate Operations

With its domain “arbismart.com” first registered in July 2018, the platform provided no information about its ownership or management. Although ArbiSmart claimed to be “EU-regulated,” what they actually had were virtual licenses for crypto-wallets in Estonia. However, none of these licenses covered the passive investment services ArbiSmart was offering, meaning they were illegally providing investment services.

The Italian financial supervisory agency determined that the platform was not registered to offer crypto-asset investments in Italy or anywhere else in Europe. MiCAR, the European regulation governing crypto-assets, clearly states that only authorized entities can provide such services.

CONSOB’s Action

Following a complaint from an Italian investor, CONSOB launched an investigation and found that ArbiSmart did not possess the necessary license to offer investment services in Italy or any other EU country. In accordance with MiCAR regulations, the platform was ordered to cease all activities and stop violating the law. This decision serves as a positive example of how the European Union is tackling unregulated crypto-operators and protecting investors from fraud.

Your DefendMe Team