The Central Bureau of Investigation (CBI) has conducted raids at 60 locations nationwide, including major cities like Delhi NCR, Pune, Chandigarh, Nanded, Kolhapur, and Bengaluru to investigate the GainBitcoin cryptocurrency scam worth 800 million USD (₹6,600 crore).
GainBitcoin – Large-Scale Ponzi Scheme
#GainBitcoin was established in 2015 by Amit Bhardwaj (who passed away in 2022) and his brother Ajay Bhardwaj, operating under the name Variabletech Pte. Ltd.. This project promised attractive returns of 10% per month in Bitcoin (BTC) through cloud mining contracts. However, in reality, it was merely a multi-level Ponzi scheme (MLM), where participants earned commissions not only from direct investments but also from those they referred.
Initially, investors received profits in BTC, but by 2017, when the system collapsed, GainBitcoin switched to using an internal currency, MCAP – which was worth much less than Bitcoin. Thousands of investors were left stuck with a nearly worthless digital asset.
CBI Expands Investigation – Tracing Illegal Funds
The CBI has taken over the entire case and is conducting a large-scale investigation aimed at:
✅ Identify all stakeholders.
✅ Trace the embezzled funds, including international transactions.
✅ Collect crucial evidence such as cryptocurrency wallets, emails, and cloud data.
In March 2022, the Supreme Court of India ordered Ajay Bhardwaj to disclose information about his late brother's cryptocurrency wallet, aimed at determining the actual scale of the fraud and tracing the stolen funds.
#CBI has also consolidated multiple lawsuits from states like Jammu & Kashmir, Punjab, Delhi, West Bengal, Karnataka, and Maharashtra into a single investigation to ensure more efficient handling.
Strengthening Law Enforcement on Cryptocurrency
The investigation into GainBitcoin is just part of the Indian government's crackdown on fraud activities in the cryptocurrency sector.
📌 Last week, Mumbai police charged Ravi Mahaseth, CEO of Coin ZX, for defrauding 200 crore INR (23 million USD) from investors by promising high returns from Bitcoin.
📌 The Enforcement Directorate of India (ED) has also conducted raids in Delhi, Jaipur, and Mumbai to investigate an illegal cryptocurrency exchange worth 600 crore INR (72 million USD) related to Chirag Tomar – a person imprisoned in the U.S. for defrauding over 20 million USD by spoofing the Coinbase exchange website.
Stronger Legal Framework Needed
According to experts, scams like GainBitcoin highlight the need for stricter regulations to protect investors.
🗣 Sudhakar Lakshmanaraja, founder of Digital South Trust, stated:
"Despite regulatory oversight, multi-level fraud schemes continue to thrive by exploiting legal loopholes and public ignorance."
🗣 Vedang Vatsa, founder of the Hashtag Web3 community, also remarked:
"This investigation shows the Indian government's commitment to crack down on cryptocurrency fraud. However, balanced regulations are needed to ensure investor safety while promoting innovation in the digital asset ecosystem."
Conclusion
With the scaling up of the investigation, the Indian authorities are sending a clear message: there will be zero tolerance for fraudulent activities in the cryptocurrency sector. However, for this industry to grow sustainably, a transparent legal framework and more effective investor protection policies are needed.