CBI Raids 60 Locations Across India In INR 6,600 Cr GainBitcoin Crypto Scam

The Central Bureau of Investigation (CBI) has reportedly carried out raids at 60 locations across India in connection with its ongoing investigation into the GainBitcoin crypto scam that bilked victims out of INR 6,600 Cr (about $758 Mn).

The investigative agency conducted search operations in several cities such as Delhi NCR, Bengaluru, Pune, and Chandigarh among others, targeting premises linked to the prime accused in the case, their associates, and entities suspected of laundering stolen money, as per a Business Standard report.

During the exercise, the CBI seized some crypto wallets, suspicious digital devices, and evidence found in emails and clouds.

The investigation so far has revealed that scamsters defrauded victims under the pretext of investing in Bitcoin. Investors were persuaded to purchase Bitcoin from exchanges and invest them with GainBitcoin through “cloud mining” contracts with the promise of huge returns of 10% per month.

GainBitcoin was a crypto-based ponzi scheme launched in 2015 by Amit Bhardwaj (deceased) and his brother Ajay Bhardwaj. It was carried out through multiple websites such as www.gainbitcoin.com, which blanketed itself under the identity of Variabletech Pvt. Ltd.

The scam came to light when several GainBitcoin investors lodged FIRs across India, alleging fraud and money laundering. Given the scale and complexity of the cases, registered in states such as Punjab, Delhi, West Bengal, Madhya Pradesh, Karnataka, and Maharashtra, the Supreme Court handed them over to the CBI.

Investors were initially paid in Bitcoin for bringing in new investors and investing with GainBitcoin. However, the scheme began to crumble in 2017 amid a slowdown in new investments. To make up for losses, GainBitcoin switched payouts to its alleged in-house crypto token MCAP, which had a hair worth of value as compared to Bitcoin.

Consequently, the CBI initiated a probe into the matter to unearth the full extent of the fraud, identify perpetrators and trace misappropriated funds.

This comes at a time when a string of scandals has kneecapped India’s crypto ecosystem and eroded investors’ faith. In July last year, North Korea’s hacking group Lazarus attacked crypto exchange WazirX and stole nearly $235 Mn worth of cryptocurrency, leaving over 4 Mn Indians in limbo.

In October 2024, crypto exchange Binance and Delhi Police joined forces to dismantle a complex scam orchestrated by a fraudulent entity “M/s Goldcoat Solar”, leading to multiple arrests and seizure of over 1 Lakh USDT in cryptocurrency assets. 

Earlier this month, it was reported that the Enforcement Directorate seized assets worth INR 1,646 Cr as part of an investigation led by US authorities into a global $2.4 Bn crypto Ponzi scheme, BitConnect.