The Directorate of Enforcement (ED) attached $60 million worth of assets in connection with its probe against Amit Bhardwaj in the alleged Bitcoin Ponzi fraud of $5.26 billion.
The Indian law enforcement agency has attached immovable properties of the owner of GainBitcoin.com, including six offices in Dubai and the residential apartments and bank balances of two of his associates Hemant Bhope and Pankaj Adlakha, under the provision of Anti Money Laundering (AML) act.
It is the first attachment in the case where Bhardwaj, under the guise of Variabletech Pvt Ltd, Singapore, duped 8,000 people into investing in his fraudulent Bitcoin trading Ponzi scheme, www.gainbitcoin.com. The alleged conspirator would hold marketing events at expensive hotels across India, where his associates attracted attendees towards their Bitcoin mining investment schemes. In an event held in Noida city in 2016, which the author attended in person, the marketers claimed that GainBitcoin owns mining facilities in China. As proof, they showed attendees video clips that formerly belonged to one of the Motherboard coverages of a Chinese mining facility.
Tricks such as these were used to lure people that had no prior knowledge of Bitcoin. The digital currency’s potential as an investable asset would fuel investors’ interest, with most of them often mistaking GainBitcoin as the “Bitcoin company.” One of the Indian parliamentarians even went ahead calling Bitcoin a Ponzi scheme while referring to GainBitcoin.
Under these shady schemes, Bhardwaj and his associated embezzled around 8,000 Bitcoins. When the time to pay back investors arrived, Bhardwaj issued them a privately created, and worthless, cryptocurrency called MCAP. He even purchased sponsored stories across the leading news channels in the Bitcoin industry to fake a positive sentiment about his coin.
“There are large numbers of investors who got cheated in this way,” the ED stated.
For a more significant time, readers in India with access to basic knowledge of Bitcoin saw the digital currency as a tool to scam people. GainBitcoin unknowingly initiated a mistrust between the regulators and digital currency companies that continues to haunt the crypto-regulatory climate in the country even today.
Bhardwaj even roped in Bollywood celebrities, including Bipasha Basu, Shilpa Shetty, and Nargis Fakhri, to promote his ebook called Cryptocurrency for Beginners. Shilpa Shetty’s husband and celebrated Indian businessman Raj Kundra also faced ED over his monetary involvement in Bhardwaj’s company.
The Pune police arrested Bhardwaj in April at New Delhi airport when he was returning from Dubai. Since then, Bhardwaj has offered to repay his investors in Indian Rupees. The price of Bitcoin has increased ever since which is why investors have rejected Bhardwaj’s proposal in fears of losing out on profits they could make had they held onto their crypto-assets.