ED of India Ramps Investigation in GainBitcoin Fraud 

|On Wed April 20, 2022 | 9:25AM IST| 

The Enforcement Directorate (ED) of India is speeding up its investigation into a huge cryptocurrency scam that allegedly resulted in losses of more than Rs. 2,000 crores. On April 18, officials from the Enforcement Directorate paid a visit to the Pune Police Commissioner to gather different documents and information connected to the 2018 case.

Pankaj Ghode, a cybercrime specialist, and Ravindra Patil, a former police officer, are among the persons being probed on suspicion of falsifying evidence and stealing a total of 1,137 Bitcoins while working on the initial crypto fraud case. Both males have been detained and are being held without bail while the inquiry is ongoing. 

ED of India Ramps Investigation in GainBitcoin Fraud

“Don’t play games with us,” the Supreme Court told scam mastermind Amit Bhardwaj 

Ghode and Patil were both charged with uncovering information on the big scam performed by Amit Bhardwaj, which they successfully did. 

According to CryptoPotato, Bhardwaj was accused of running a multilevel marketing (MLM) scam called GainBitcoin, which promised investors a 10% monthly return on their Bitcoin investments. 

According to the indictment, the two former investigating officers are accused of shifting Bitcoins worth millions of dollars from Bhardwaj’s hands into their cryptocurrency wallets and then sharing edited screenshots with other officers working on the case. 

At the time of writing, the value of the Bitcoins seized by Ghode and Patil totals a staggering Rs. 354 billion. 

Founded by Amit Bhardwaj, Gainbitcoin was a multi-level marketing scam that failed miserably. 

They promised a 10% monthly return on Bitcoin-on-Bitcoin deposits for 18 months if they used multi-level marketing (MLM) schemes to recruit new members. In exchange for lending the corporation Bitcoins, investors were promised that their returns on their investments will rise within the period specified above. 

Given the restricted quantity of Bitcoins available, the logic of this MLM appeared to be fundamentally wrong, but many investors had already invested their money in it without realizing they had made a mistake in their decision to deposit their money.  

In the case of Bitcoin, investors never got their initial investment plus interest. In exchange for the repayment of the principal and interest, the promoters of GainBitcoin issued a new currency called MCAP, which was designed specifically for this purpose. MCAP lacked the fundamental value that Bitcoin possessed, and as a result, all of the investors lost their money. 

When top officials reviewed Bhardwaj’s KYC information, they discovered that their hired cyber security expert and a fellow police officer had committed a clerical error, resulting in their incarceration earlier this year in March. 

While this was going on, the Supreme Court of India sentenced Bhardwaj on April 18 for failing to comply with the ED and for failing to divulge the data from his bitcoin wallets. 

“Don’t play games with us,” the Supreme Court admonished Bhardwaj after directing him to hand over the passwords to his bitcoin wallets to the ED.For the time being, it appears that the investigations into the case are far from over. For the time being, the authorities are looking into Bhardwaj, Ghode, and Patil. 

India has just recently begun to regulate the cryptocurrency industry, and the nation does not yet have procedures in place to monitor occurrences of bitcoin fraud, which looks to be gaining traction in the country. For example, a 30-year-old Bengaluru-based crypto investor is believed to have lost more than Rs. 2 crores in a hoax earlier this month, according to reports. 

At the end of December 2021, the Rajkot criminal branch in Gujarat detained two persons from Surat who had deceived 17 people out of a total of Rs. 38 lakhs by promising them higher rewards on their bitcoin investments. While criminals are already ramping up their efforts in the Bitcoin arena, Indians are falling prey to scam websites owing to a lack of study and awareness on the side of the populace. 

According to industry research firm Chainalysis, fraudulent bitcoin websites received 9.6 million views from India in the previous year. 

Shikha Goel, the Additional Commissioner of Police (Crimes and SIT) of Hyderabad, has issued a caution to cryptocurrency investors in India in December 2021, asking them to avoid depositing assets into the unknown, unauthorized wallets. 

Published By : Akshita Katoch 

Edited By : Vanshika Sahu