NEW DELHI: The Central Bureau of Investigation (CBI) has been conducting extensive raids at over 60 locations linked to key accused individuals, their associates and entities suspected of laundering the proceeds of crime across India as part of its investigation into the Gain Bitcoin cryptocurrency scam case, officials said on Tuesday.
According to the officials the coordinated raids are being carried out in major cities, including Delhi NCR, Pune, Chandigarh, Nanded, Kolhapur, Bengaluru and other places, targeting the premises linked to key accused.
Given the vast scale and complexity of the scam, the FIRs were registered in various states, including Jammu & Kashmir, Punjab, Chandigarh, Delhi, West Bengal, Madhya Pradesh, Karnataka, and Maharashtra and were subsequently transferred to the CBI by the Supreme Court, the officials said.
A senior CBI official said, “The agency took over the cases and has been conducting an omnibus and comprehensive investigation to uncover the full extent of the fraud, identify all accused parties, and trace the misappropriated funds, including international transactions.”
“During searches few crypto wallets, incriminating digital evidence and digital devices have been seized. The evidence present in emails/clouds has also been seized. The CBI remains committed to ensuring a thorough and impartial investigation and bringing the perpetrators of this massive cryptocurrency fraud to justice,” the official said.
“Gain Bitcoin was an alleged Ponzi scheme launched in 2015 by Amit Bhardwaj (deceased), along with Ajay Bhardwaj and their network of agents. The scheme operated through multiple websites such as www.gainbitcoin.com etc., under the facade of a company named Variabletech Pte. Ltd,” a senior CBI official said.
The fraudulent scheme lured investors by promising lucrative returns of 10 percent monthly in Bitcoin for 18 months, the officials said, adding that gullible investors were encouraged to purchase Bitcoin from exchanges and invest them with Gain Bitcoin through “cloud mining” contracts.
The model followed a multi-level marketing (MLM) structure, commonly associated with pyramid-structured Ponzi schemes, where payouts were dependent on bringing in new investors, the officials said.
“Initially, investors received payouts in Bitcoin. But, as the influx of new investments dwindled by 2017, the scheme began to collapse. In an attempt to cover up the losses, Gain Bitcoin unilaterally switched payouts to their alleged in-house cryptocurrency called MCAP, which had significantly less value than Bitcoin, further misleading investors, the officer alleged.