The Enforcement Directorate has registered a case against Amit Bharadwaj, a bitcoin entrepreneur who has duped investors to the tune of Rs 2,000 crore with a Ponzi marketing schemes through the GainBitcoin website.
Touted as a cryptocurrency guru in India, Bhardwaj ran a slew of ventures, including GainBitcoin, GBMiners, MCAP and GB21. The ED’s decision came on the same day as the Reserve Bank of India’s decision to ban regulated entities from dealing in virtual currencies. The ED has booked him under an enforcement case investigation report (ECIR). This is the first ECIR registered by the ED for violations involving virtual currencies.
The case was filed hours after Bharadwaj was arrested by Pune Police at Delhi IGI Airport. Bhardwaj fled the country couple of months ago and was hiding in Dubai. He later slipped to Bangkok. A lookout notice was issued for him. The cyber crime cell of Delhi police has also filed an FIR (first information report) against Amit Bhardwaj, Ajay Bhardwaj, Rupesh Singh, Hemant Chauhan, Hemant Suryavanshi, Kaka Ravde, and others, under Sections 406, 420 and 34 of the Indian Penal Code. The FIR stated that through this Ponzi scheme, Bharadwaj convinced people to invest in Gatbitcoin.com, which is owned by Variable Trade Pvt ltd, a company registered in Singapore.
A similar FIR was registered against Amit Bharadwaj by the cyber crime cell in Pune in January this year, too.
Bhardwaj and his associates allegedly duped investors in Mumbai, Pune, Nanded, Kolhapur and other places in the state. Bharadwaj allegedly lured people from Nanded and other areas to invest in Bitcoins, while promising higher returns. Bitcoin, a virtual currency, is not regulated in the country and its circulation has been a cause for concern among central bankers the world over for quite a while now.
Sources said that the alleged scam could run between Rs 5,000 crore and Rs 13,000 crore. “The actual size of the fraud could be much bigger, given the scale of Bhardwaj’s operations His business, grew rapidly from India to the UAE, Russia, Ukraine, Hong Kong, Indonesia to Venezuela,” sources added.
The suspect, unlike other fraudsters, used a flash drive to store the cryptocurrency investment, the sources added. the actual size of the fraud could be much bigger, given the scale of Bhardwar’s operations
Intelligence sources familiar with the investigations said that Bhardwaj’s suspected links with Pakistanis would also be probed. Bitcoin has fallen heavily in recent sessions as worries about a regulatory clampdown on the nascent market and panicked investors push prices lower. The virtual currency hit a peak of almost $20,000 in December.