Police investigations into the infamous cryptocurrency Ponzi scheme GainBitcoin, estimated at $300 million, are fast making progress as authorities have stated they now possess “crucial clues” on how the fraudulent organization laundered money.
As reported by The Indian Express on July 13, 2018, police from the Indian state of Gujarat are actively probing the multi-million scam, stating the interrogation of prime accused Amit Bharadwaj has led to several hints on how the massive operation took place over the years.
Interestingly, Bharadwaj was placed under interrogation by crime forces of five Indian cities, to no avail. However, a special investigation team from Pune seems to be successful in this regard, as they received valuable information from Bharadwaj and seven other people acting as GainBitcoin “agents, including a motivational speaker who held investment workshops to trap unsuspecting investors.
The scam came to light after two First Information Reports (FIRs) were filed against GainBitcoin in April 2018, followed by another FIR filed in a different city. Authorities immediately regarded the crime as a multi-city operation after this development.
In May 2018, a victim complained against GainBitcoin in Pune, post which the local police gained custody of Bharadwaj for interrogations.
Later, Bharadwaj revealed how the racket managed to park illicit funds in China, Hong Kong, and Dubai, while successfully evading Indian customs.
A police officer added:
“The clues about money laundering have been communicated to the Enforcement Directorate. The probe shows that Bhardwaj and his aides had set up an elaborate MLM system by luring investors to hand him Bitcoins in the promise of higher returns. This money was later diverted to bigger international markets and other money siphoning methods.”
The report estimated the scam to cross over Rs.5,000 crore, affecting over 8,000 people in India.
On May 9, 2018, CCN reported Indian police had raided an Ethereum mining installation involved in the GainBitcoin MLM schemes which raked in nearly INR 100 crores ($15 million) from investors.
Police authorities additionally raided a 4,000 square-foot mining installation in Dehradun, a city near the Indian capital of Delhi, seizing 100 Ethereum mining rigs along with 500 graphics cards and servers.
Earlier, a victim detailed his ordeal to police authorities. In July 2017, the victim invested 0.1 BTC in July 2017 after the two operators promised a payout of 12 percent every month in bitcoin over an 18-month contract. He was asked to rope in additional investors to earn an additional 12 percent each month, which the unsuspecting victim did.
However, GainBitcoin never paid any dividends and allegedly stopped responding to all calls, before employees claimed the organization's operators "have left to Dubai with all funds."
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