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The GainBitcoin fraud, which shook the country a few months ago, is turning out to be far greater than first imagined, with sources claiming that about 100,000 victims may have lost more than Rs 1 trillion.
A vast number of people from various states may have lost their hard-earned funds in the GainBitcoin scam, with a total of 40 FIRs filed by victims (more than 13 FIRs in Maharashtra alone) and Punjab.
Amit Bhardwaj, the mastermind who died of cardiac arrest earlier this year, is estimated to have acquired between 385,000 and 600,000 Bitcoins worth more than Rs 1 trillion. Bitcoin prices are still volatile, having dropped from an all-time high of over $68,000 in November of last year to around $21,000 at the time of writing.
The entire value is about Rs 90,500 crore, based on the current Bitcoin price of around Rs 23,57,250 per Bitcoin. According to several media sources, Pune police have traced over 60,000 user IDs and email addresses in the GainBitcoin case.
GainBitcoin was a pyramid, multi-level marketing plan, similar to other ponzi scams, with Amit Bhardwaj at the top and his 'Seven Stars,' who operated in India and internationally.
Through multi-level marketing programmes, they promised a 10% monthly return on Bitcoin-on-Bitcoin deposits for 18 months. Investors were tempted to lend the company Bitcoins on the premise that their money will grow throughout the time period stated.
The model was wrong, however, since there was a finite quantity of Bitcoins, but numerous investors had put their money in by the time they recognised they had made a major error. At the moment, all eyes are on Ajay Bhardwaj, Amit's brother and the main suspect in the GainBitcoin scheme.
The Enforcement Directorate (ED) asked the Supreme Court in March to order one of the accused in the GainBitcoin scam to provide access to his crypto wallet, including a username and password, claiming that the issue of "legality of crypto currency" does not arise in the case because it is a ponzi scheme.
“The investigation conducted so far has revealed that Amit Bhardwaj (who died in January this year) with 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 informed the Supreme Court that the petitioner's brother had died and that he was in possession of the petitioner's crypto wallet login and password, which had to be supplied to the investigating officer. The petitioner's lawyer stated that some of the petitioner's materials are being held by the Pune police.
The Supreme Court chastised Ajay Bhardwaj last month for failing to comply with its order that he reveal the login and password of bitcoin wallets to the ED.
Several crypto wallets belonging to the defendants that were used for cryptocurrency collecting are still missing. The ED searched six sites, including one in Delhi, earlier this month as part of a massive probe into the suspected fraud of over 1 lakh investors.
According to sources, the investigation agency confiscated a number of electronic devices as well as important documents. IANS reports suggest that searches were carried out on a number of officers and attorneys associated with a Delhi-based legal company.