The Enforcement Directorate (ED), on September 21, 2018, said that it has attached assets worth Rs 42.88 crores in India and Dubai, in connection with a money laundering probe related to a bitcoin transaction case. The agency said it has issued a provisional order for attachment of properties under the Prevention of Money Laundering Act (PMLA).
The properties include six offices of the alleged kingpin of the scam, Amit Bhardwaj, in Dubai and flats and bank balances in India of two of his marketing agents. These are worth Rs 42.88 crores, the ED said.
Bhardwaj started a company in Singapore – Ms Variabletech Pvt Ltd – in 2015 and through its website www.gainbitcoin.com, he launched a ponzi scheme for bitcoin trading, according to the ED investigation. Bitcoin is a virtual crypto-currency which is illegal in India.
The ED said that under the scheme, Bhardwaj, through his team of marketing agents, used to lure people by asking them to buy bitcoins out of their investments. He then invested them in his gainbitcoin scheme, by promising very high returns in terms of the crypto-currency itself, by use of bitcoin mining kits, the agency said.
“Through this, Bhardwaj and his marketing agents were able to collect investments worth about 80,000 bitcoins,” it said. However, instead of paying back the promised returns to the investors in bitcoins, Bhardwaj offered them returns in his own newly launched crypto-currency token, which had nearly no value on crypto-currency exchanges, the ED said. “There are large numbers of investors who got cheated in this way,” it said. The ED, early this year, had registered a criminal case under the PMLA against bitcoin-based investment website gainbitcoin, its founder Bhardwaj and eight others.
It is alleged that about 8,000 investors lost about Rs 2,000 crores of funds, by transacting in this scheme. The ED had filed its case, based on an FIR of the Maharashtra Police and the Pune Police had arrested Bhardwaj and his brother Vivek, from Delhi. Bhardwaj reportedly was behind ventures like GainBitcoin, GBMiners, MCAP and GB21 and the investors were allegedly duped, after transactions on these portals. It is alleged that Bhardwaj and his associates allegedly duped investors to the tune of Rs 2,000 crores in Mumbai, Pune, Nanded, Kolhapur and other places in Maharashtra.