The Central Bureau of Investigation (CBI) on Tuesday conducted extensive raids at 60 locations across India as part of its ongoing probe into the Rs 6,600 crore GainBitcoin cryptocurrency scam, officials confirmed. The coordinated searches targeted key suspects and their associates in cities including Delhi NCR, Pune, Chandigarh, Nanded, Kolhapur, and Bengaluru.
The GainBitcoin scam, one of India’s largest cryptocurrency frauds, was orchestrated by Amit Bhardwaj (now deceased) and his brother Ajay Bhardwaj through a network of platforms, including the flagship website www.gainbitcoin.com. The operation, which began in 2015, was disguised under the Singapore-based entity Variabletech Pte. Ltd.
The fraudulent scheme lured investors with promises of extraordinary returns of 10% per month in Bitcoin over an 18-month period. Investors were encouraged to purchase Bitcoin from external exchanges and deposit it with GainBitcoin through “cloud mining” contracts. The scam operated on a multi-level marketing (MLM) model, typical of pyramid-structured Ponzi schemes, where payouts relied heavily on recruiting new investors.
Initially, investors received payouts in Bitcoin, creating the illusion of a profitable venture. However, by 2017, as new investments slowed, the scheme began to collapse. To conceal mounting losses, GainBitcoin allegedly shifted payouts to its in-house cryptocurrency, MCAP, which had significantly lower value than Bitcoin, further duping investors.
The scam’s vast scale and complexity led to the filing of multiple FIRs across India, from Jammu and Kashmir to Maharashtra and from Delhi to West Bengal. Given the operation’s expansive nature and international implications, the Supreme Court transferred the investigation to the CBI.
A CBI spokesperson stated, “The agency is conducting a comprehensive investigation to uncover the full extent of the fraud, identify all accused parties, and trace misappropriated funds, including international transactions.”
During the recent raids, the CBI seized crypto wallets, digital devices, and incriminating evidence, including emails and cloud data. These findings are expected to shed light on the scam’s intricate network and the flow of funds across borders.
Latest Developments:
- The CBI is intensifying efforts to trace international transactions linked to the scam.
- Authorities are scrutinizing digital evidence to identify additional suspects and recover misappropriated funds.
- The investigation highlights the growing need for stricter regulations in India’s cryptocurrency market to prevent such frauds.
The GainBitcoin scam underscores the risks associated with unregulated cryptocurrency investments and serves as a cautionary tale for investors. As the CBI continues its probe, the case remains a focal point in India’s fight against financial fraud in the digital age.
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