India’s biggest crypto fraud to date continues to throw up new details, extending the size and scope of the scam even four years after the case first came to light.
Earlier, the police estimated that the GainBitcoin scam involved about 80,000 BTC, but now they suspect the number to be anywhere between 385,000 to 600,000, media reports said. Even at the current rate, 600,000 BTC is worth over $12 billion, close to INR one trillion.
Reports also suggest that the number of people cheated could be 100,000. The police complaints (First Information Report – FIR) lodged by investors who lost their money in the MLM scheme have increased to 40. So far, the police have detected 60,000 user IDs and email addresses.
The mastermind of the GainBitcoin scam, Amit Bhardwaj, died of cardiac arrest in January this year.
Flawed Business Model
This multilevel marketing scheme offered a 10% monthly return in bitcoin on BTC investments for 18 months. Investors from India and abroad deposited their BTC in the lure of higher returns. But given the limited number of BTC, it was a flawed business model right from the outset that finally went bust in 2018, leaving a long trail of cheated investors.
During the protracted investigation and judicial proceedings, the Supreme Court of India once asked the government attorney to explain whether bitcoin is legal or not in India — a question that the authorities have so far avoided directly answering.
Tracing the Wallets
India’s Enforcement Directorate (ED) is investigating the case and booked several Amit Bhardwaj’s family members, including his father and brother, for their alleged involvement in the scam. In March, it moved the Supreme Court of India to give directions to one of the prime accused and Amit Bhardwaj’s brother to provide access to his crypto wallets by giving usernames and passwords.
However, the accused said through his lawyer he had already provided all the details to the police.
But the investigators believe the Bhardwaj family, including Ajay, used multiple wallets to collect BTC deposits, and many of them are still to be traced. Earlier this month, the ED conducted raids at six locations in Delhi, including some related to attorneys of a Delhi-based law firm.
Media reports revealed that the ED confiscated several electronic devices and crucial papers, suggesting that the number of people cheated by the GainBitcoin scam could be over 100,000.
Earlier, CryptoPotato reported that the police arrested two private investigators for stealing 1,100-odd BTC from one of the wallets during the investigation in this case. They were taken on board to assist the police in the investigation as the authorities lacked the necessary expertise.
One of the investigators was a former police officer of the prestigious Indian Police Service (IPS) who had taken voluntary retirement and started a private investigation firm specializing in cryptocurrency fraud.