The GainBitcoin scam that rocked India in the recent past has been estimated to have been worth a mind-boggling Rs 1 trillion with more than one lakh people falling prey to it.
As many as 40 FIRs have been registered by the victims in Punjab and Maharashtra alone. While 27 FIRs were lodged in Punjab, 13 were registered in Maharashtra. Thousands of people from other states are reported to have lost their hard-earned savings in the GainBitcoin scam.
According to sources, Amit Bhardwaj, the mastermind who died of cardiac arrest earlier this year, might have collected Bitcoins anywhere between 3.85 lakh and 6 lakh, aggregating over Rs 1 trillion.
In fact, according to estimates, the amount may even be bigger as Bitcoin prices remain volatile and dropped from their all-time high of around $68,000 in November last year to around $21,000 as of now.
Taking the current Bitcoin price of around Rs 23,57,250 per Bitcoin, the total amount comes to nearly Rs 90,500 crore.
To date, more than 60,000 user IDs and email addresses have been traced by Pune police in the GainBitcoin case, according to multiple media reports.
Like most of the Ponzi schemes, GainBitcoin also had a pyramid, multi-level marketing scheme, with Amit Bhardwaj at the top and then his ‘Seven Stars’ who used to operate in India and abroad.
They guaranteed a 10 per cent monthly return in Bitcoin-on-Bitcoin deposits for 18 months via multi-level marketing programmes.
Investors were enticed to lend the corporation Bitcoins on the promise that their investments will be increased during the aforementioned period.
However, since there are a limited number of Bitcoins, the model was flawed, but several investors had put their money by the time they realized they had made a grave mistake.
Currently, all eyes are on Ajay Bhardwaj, the brother of Amit Bhardwaj and the prime accused in the GainBitcoin scam.
In March, the Enforcement Directorate (ED) urged the Supreme Court to issue direction to one of the accused in the GainBitcoin scam to provide access, username and password, to his crypto wallet, contending that the issue of “legality of cryptocurrency” does not arise in the matter, as it is a Ponzi scheme.
“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 told the apex court that the brother of the petitioner has died, and he owns the username and password of crypto wallets, which must be disclosed to the investigating officer. The petitioner’s counsel submitted that some material is in the custody of the Pune police.
Next month, the Supreme Court pulled up Ajay Bhardwaj for not complying with its direction to divulge details of the username and password of cryptocurrency wallets to the ED.
Still, several crypto wallets belonging to the accused that were used for cryptocurrency collection purposes are yet to be traced.
Earlier this month, the ED raided six locations, including in Delhi, as part of a large investigation into the alleged scamming of over 1 lakh investors.
The investigative agency seized numerous electronic devices and crucial papers, according to reports.
Numerous officers and attorneys linked with a Delhi-based law firm were also subject to raids, the reports said.