The sheer size of probably the biggest crypto ponzi scam in our country is turning out to be massive. Reports suggest that around 1 lakh victims may have around Rs 1 trillion in the GainBitcoin scam, as mentioned in ET.
With a total of 40 FIRs reportedly registered by victims (more than 13 FIRs in Maharashtra alone) and Punjab, a large number of people from other states may have also lost their hard-earned savings in this massive scam.
Amit Bhardwaj, who was the mastermind of this case, had died of cardiac arrest this year in January. He was earlier arrested by the ED in March 2018. As the case keeps getting dug up, it's estimated that he may have collected Bitcoins anywhere between 385,000 to 600,000, thus amounting to around Rs 1 trillion or even more, as per the report.
The amount may even be bigger as Bitcoin prices remain volatile and dropped from their all-time high of around $68,000 in November last year to around $21,000 as of now.
Taking the current Bitcoin price of around $21,000 per Bitcoin, the total amount comes to be over Rs 98,000 crore for 6 lakh bitcoins. (at present currency rate of Rs 78.07=$1)
Till date, more than 60,000 user IDs and email addresses have been traced by Pune police in the GainBitcoin case, according to multiple media reports.
Like most Ponzi schemes, GainBitcoin also had a pyramid, multi-level marketing scheme, with Amit Bhardwaj at the top and then his 'Seven Stars' who used to operate in India and abroad, as per ET.
Ponzi schemes are usually a form of fraud in which belief in the success of a non-existent enterprise is fostered by the payment of quick returns to the early investors from the money invested by later investors/members.
Under the scheme, Amit had reportedly guaranteed a 10% monthly return in Bitcoin-on-Bitcoin deposits for 18 months via multi-level marketing programmes.
Investors were enticed to lend the corporation Bitcoins on the promise that their investments will be increased during the aforementioned period.
However, since there are a limited number of Bitcoins, the model was flawed, but several investors had put their money by the time they realized they had made a grave mistake, the report stated.
In 2017, Zakhil Suresh, who was a Gainbitcoin user, started a?petition on change.org.?The?petition?appealed?for?Amit?Bhardwaj¡¯s?arrest?for?this?allegedly?fraudulent?scheme, as per the Inc42 report.?
As per the petition, Suresh was a finance student living in Kerala who, after getting interested in Bitcoins and Amit¡¯s startup Gainbitcoins, flew to Delhi to meet him. He ended up investing in Bitcoins but when he tried to withdraw Bitcoins from the service, he could not.?
?In 2017 itself, based on the complaint of an investor Nisha Raisoni ¡ª an FIR was filed at Dattawadi Police station after which Pune Police filed FIR against Amit Bhardwaj & 3 others ¡ª Amol Vijay Kumar, Raju Ramrav and Balaji, as per Inc42.?
And since then, days, weeks, months and even years flew by, and many people in different states came forward to register cases regarding this GainBitcoin scam.?
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Currently, all eyes are on Ajay Bhardwaj, the brother of Amit Bhardwaj and the prime accused in the GainBitcoin scam.
Earlier this month, the ED raided six locations, including in Delhi, as part of a large investigation into the alleged scamming of over 1 lakh investors.
The investigative agency seized numerous electronic devices and crucial papers, according to reports.
Numerous officers and attorneys linked with a Delhi-based law firm were also subject to raids, the reports said, as per ET.
"The investigation conducted so far has revealed that Amit Bhardwaj (who died in January this year) with the connivance of petitioner, Vivek Bhardwaj, Mahender Bhardwaj and others i.e, multi-level marketing agents and associates have collected 80,000 bitcoins as proceeds of crime," said the ED affidavit, as per ET.
In March 2022, the Enforcement Directorate (ED) had reportedly urged the Supreme Court to issue direction to one of the accused in the GainBitcoin scam to provide access, username and password, to his crypto wallet, contending that the issue of "legality of cryptocurrency" does not arise in the matter, as it is a Ponzi scheme.
The ED had reportedly told the apex court that the brother of the petitioner has died, and he is in possession of the username and password of crypto wallets, which must be disclosed to the investigating officer. The petitioner's counsel submitted that some material is in the custody of the Pune police.
Next month, the Supreme Court had pulled up Ajay Bhardwaj for not complying with its direction to divulge details of the username and password of cryptocurrency wallets to the ED.
Still, several crypto wallets belonging to the accused that were used for cryptocurrency collection purposes are yet to be traced.
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