The Central Bureau of Investigation has taken major action in the much talked about Gain Bitcoin cryptocurrency scam worth around ₹20,000 crore. The agency has arrested Darwin Labs co-founder Ayush Varshney. Officials gave this information on Wednesday.
According to CBI, Varshney is one of the main accused in the case. The agency had already issued a Look Out Circular (LOC) against him. On Monday, when he was trying to flee the country, he was detained after an alert was issued at Mumbai airport. After this, he was formally arrested on Tuesday.
What came to light in the investigation?
According to the investigating agency, Darwin Labs had created the digital framework on which the entire technical system of the ongoing Gain Bitcoin scam was allegedly based. The investigation has revealed the role of Darwin Labs Private Limited and its co-founders Ayush Varshney, Sahil Baghala and Nikunj Jain. Nikunj Jain is currently also the Founder and Chief Capital Officer of Waomi AI.
The CBI alleges that these people together designed and developed a crypto token called MCAP and its associated ERC-20 smart contract, which were used in this alleged crypto Ponzi scheme.
The investigation also revealed that Darwin Labs had created several important digital platforms, including a Bitcoin mining pool platform called GBMiners.com, a Bitcoin payment gateway, Coin Bank Bitcoin wallet and the Gain Bitcoin website. Investors were contacted and invested through these platforms.
When and how did the whole scam happen?
This scam started in the year 2015 under the name Gain Bitcoin, which was allegedly being operated in the name of Variabletech Pvt. Ltd. According to the investigating agency, the masterminds of this plan were Amit Bhardwaj (now deceased) and his brother Ajay Bhardwaj.
In this scheme, investors were lured with Bitcoin returns of up to 10% every month for 18 months. People were asked to buy Bitcoin from an external exchange and deposit the gains in Bitcoin through so-called cloud mining contracts.
According to the CBI, this model was a Ponzi scheme based on multi-level marketing (MLM), in which payments to old investors were made from the money coming from new investors. In the initial phase, people started finding this scheme profitable due to payment in Bitcoin.
But after 2017, when the flow of new investors decreased, the company suddenly started making payments in its own created crypto token MCAP instead of Bitcoin, whose price was much lower than Bitcoin. This caused huge losses to investors.
Many FIRs were registered
Due to this big scam, many FIRs were registered from Jammu and Kashmir to Maharashtra and from Delhi to West Bengal. Considering the scope and international aspects of the case, the Supreme Court had handed over its investigation to the CBI.
The CBI is now taking forward the investigation to unravel the entire scam, identify all those involved and trace the money siphoned off from investors, including the funds sent abroad.