The sheer scale of possibly the biggest crypto Ponzi scheme that rocked India some time back is shaping up to be far bigger than deemed. Several reports suggest that approx. Rs 1 lakh victims may have lost over Rs 1 lakh crore (Trillion) in the GainBitcoin scam.
Overall 40 FIRs have been registered by victims with over 13 FIRs in Maharashtra, and Punjab, a huge number of people from other states may also have been duped of their hard-earned money in the fraud, IANS reported.
Amit Bhardwaj, who orchestrated the GainBitcoin scam, had died of a heart attack earlier this year and is reported to have collected anywhere between 395,000 to 600,000, amounting to over Rs 1 lakh crore.
The figure may even be larger as Bitcoin prices continue to be volatile and plunged from its all-time high of around $68,000 in November last year to approx. $21,000 as of now.
Considering the present Bitcoin rate of around Rs 23,57,250 per Bitcoin, the overall amount arrives at nearly Rs 90,500 crore. To date, over 60,000 user IDs, as well as email addresses, have been tracked down by Pune police in the GainBitcoin fraud case, according to several media reports.
How The Ponzi Scheme Worked?
Like numerous other Ponzi schemes, GainBitcoin also had a pyramid, multi-tiered scheme, with Amit Bhardwaj at the top followed by his ‘Seven Stars’ who used to handle operations in India and overseas.
How the scheme worked was that they promised a 10 per cent monthly return in Bitcoin-on-Bitcoin deposits for 18 months through multi-layered marketing programmes. People were lured to lend the corporation Bitcoins on the guarantee that their investments will grow during the aforesaid period.
But, since there are a finite number of Bitcoins, the scheme’s model was flawed, however, many investors had already invested their money by the time they realised that they had made a huge mistake.
Current Updates on the GainBitcoin Scam Case
Presently, Ajay Bhardwaj, brother of Amit Bhardwaj, is in the dock and is also the prime accused in the GainBitcoin fraud. In March, the
Enforcement Directorate (ED) had requested the Supreme Court (SC) to issue direction to one of the accused in the case to give access, username and password, to his crypto wallet, contesting that the issue of “legality of cryptocurrency” doesn’t arise in the case, as it is a Ponzi scheme.
What the ED said?
"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.
The ED informed the SC that the petitioner’s brother has died, and he has access to the username and password of crypto wallets, which must be divulged to the investigating officer. Meanwhile, the petitioner’s counsel submitted that Pune Police has custody of some material.