CBI investigates Bitcoin Ponzi Scam, charges six individuals for ₹6,606 Crore Fraud

The Central Bureau of Investigation (CBI) filed an FIR on the purported Bitcoin scam in Maharashtra on Nov 20.

Amit Bhardwaj, Ajay Bhardwaj, and four other people were charged by the agency for allegedly gathering 80,000 Bitcoins and using the money—worth ₹6,606 crore—to buy properties abroad through nine foreign companies.

The agency also summoned suspect Gaurav Mehta to join the inquiry.

In relation to the Bitcoin transactions case, the Enforcement Directorate searched Gaurav Mehta's Raipur home a few hours before the investigation.

The investigation falls under the Prevention of Money Laundering Act (PMLA) and is a part of a larger money laundering investigation.

Multiple cases were filed by Maharashtra and Delhi police against Variable Tech Pte Ltd, the late Amit and Ajay Bhardwaj, and others for allegedly operating multi-level marketing (MLM) schemes in which they allegedly collected approximately ₹6,600 crore in Bitcoins from unsuspecting individuals in 2017 while promising a 10% monthly return in the cryptocurrency.

No nation's central bank has any authority over the cryptocurrency.

On Nov 19, the Bharatiya Janata Party accused Congress leader Nana Patole and NCP MP Supriya Sule of using Bitcoins to finance the current Maharashtra Assembly elections, which she denied.

The two central investigation agencies' actions on Nov 20 revolved around Gaurav Mehta, an employee of an audit company. The ED searched his Raipur home, and the CBI summoned him to appear before the investigating officer.

Following Supreme Court directions in Dec 2023, the CBI registered three cases linked to the Gain Bitcoin Ponzi scheme in October.

Mehta is said to have collected ₹6,600 crore in Bitcoin as early as 2017, enticing investors with the promise of 10% monthly returns, according to ED sources.

According to ED, the agency has expanded its ongoing money laundering investigation into a cryptocurrency (Bitcoin) assets Ponzi scheme and is looking into Mehta's and a few others' "links" to bureaucrats, politicians, and politically exposed people.

In April, as part of its crypto-ponzi investigation, the agency seized ₹98 crore worth of assets belonging to Bollywood actress Shilpa Shetty and her husband Raj Kundra. The Bombay High Court granted the couple relief after they challenged the ED action.

According to the ED, the promoters "cheated" the investors and have been hiding the "ill-gotten" bitcoins in secret online wallets. The bitcoins were meant to be used for mining, and investors were expected to get substantial returns in cryptocurrency assets.

The "mastermind" and promoter of the Gain Bitcoin Ponzi "scam," Amit Bhardwaj, allegedly gave 285 bitcoins to Kundra in exchange for "setting up" a bitcoin mining farm in Ukraine, according to the ED.

Agency claimed that these bitcoins came from the "proceeds of crime" that Amit Bhardwaj had gathered from unsuspecting investors.

In a 2018 cryptocurrency "fraud" case under investigation by Pune Police, a former IPS officer, Ravindranath Patil, was arrested.

He also said that Mehta sent him 10 voice notes on the Signal app that contained alleged audio clips of Sule, Patole, and IPS officers Amitabh Gupta (the former Pune Police commissioner) and Bhagyashree Navtake, who was the DCP (cyber) in Pune at the time of his arrest.

Additionally, he filed a complaint with the Election Commission, saying that Sule sent Mehta three voice messages in which she allegedly asked him to cash the Bitcoins because elections needed the money and assured him that he didn't have to worry about questions because they would take care of them once they were in power.

Patil said in his email complaint to the EC that it seems hundreds of bitcoins worth billions of rupees might have been pumped in the past Lok Sabha elections and assembly polls based on the chats he claims to have.

In the complaint, Patil said that it also seems like Mehta is in possession of the hundreds of crores of rupees worth of stolen bitcoins.

According to officials, Mehta's activities might be connected to more extensive financial schemes that could have an impact on the election process.

It is anticipated that the ED will speed up its investigation into the purported misuse of cryptocurrencies.

In anticipation of a cryptocurrency-friendly government under the upcoming Trump government, Bitcoin surged to a record high above $94,000 on Nov 20 after it was reported that Donald Trump's social media company was in negotiations to purchase cryptocurrency trading platform Bakkt.

This year, Bitcoin, the largest and most well-known cryptocurrency in the world, has more than doubled in value.

Since the U.S. election on Nov 5, traders have been betting that President-elect Trump's promised support for digital assets will result in a less stringent regulatory environment and give bitcoin a boost after a lagging few months. As a result, cryptocurrencies have surged in value.