GainBitcoin Scam: Victims Demand SC-Led ED Investigation Into The Case

In another twist in the INR 90,000 Cr worth GainBitcoin scam case, Additional Solicitor General (ASG) Aishwarya Bhati, who is representing the Enforcement Directorate (ED) and Union of India, has suggested the Supreme Court to transfer the case to the Central Bureau of Investigation (CBI).

Back in 2016-2017, promising a highly inflated 10% monthly return on Bitcoin investments for 18 months, GainBitcoin, ‘an MLM scheme’ was operated by the late Amit Bhardwaj, his brother Ajay Bhardwaj, other family members and so-called ‘Seven Stars.’ However, soon it turned ‘too good to be true’, once people started losing money in the scheme and Bhardwaj kept changing the contracts without intimidating the investors.

The total number of victims in the GainBitcoin scam stands at over 1 Lakh, an investigation by Inc42 found.

The latest recommendation of handing the case over to the CBI has raised eyebrows as the case involves violations of Prevention of Money Laundering Act, 2002 (PMLA) and Foreign Exchange Management Act (FEMA) norms on multiple accounts and comes under the expertise and jurisdiction of the ED.

It’s worth noting that the suggestion comes following the transfer of ED, Mumbai, Zone II additional director Yogesh Sharma (who was supervising the entire investigation) to Delhi last month. Meanwhile, Abishek Goyal, an IPS officer of 2005 batch, has been transferred to ED, Mumbai, Zone II with the additional charge of Panaji and Raipur zones.

While the key mastermind Amit Bhardwaj died from Cardiac arrest earlier this year, in March this year, the ED filed an affidavit urging the Supreme Court to cancel the bail granted to the other key accused Ajay Bhardwaj.

Meanwhile, the victims of the scam have raised questions about Bhati’s suggestion. Some of them told Inc42 that the CBI is not equipped to investigate the matter and that the ED and Maharashtra Pune Cyber/EOW must continue the investigation as no other agency has a better understanding of the complicated case. Besides, they also called for the investigation to be carried out under the supervision of the Supreme Court.

The frequent transfers of investigating officers and changes in the Supreme Court bench hearing the case have resulted in delays in the investigation and hearings in the case.

In the Supreme Court, with the bench being changed frequently, over 15 Judges have so far heard the case. Justice Rohinton Fali Nariman, Justice Navin Sinha and Justice Vineet Saran who mostly heard the case from 2018 have since retired.

Justice Shripathi Ravindra Bhat, Justice Aniruddha Bose, Justice V Ramasubramanian, Justice Ajjikuttira Somaiah Bopanna, Justice Krishna Murari, Justice Bhushan Ramkrishna Gavai, Justice Hrishikesh Roy, Justice KM Joseph, Justice DY Chandrachud, Justice Surya Kant, Justice Indira Banerjee and Justice MM Sundresh are the other judges who have also heard the case.

The victims also questioned the removal of Justice Chandrachud, who was part of the bench during March 28 and April 18 hearings and called for the cancellation of Bhardwaj’s bail if he didn’t cooperate with the investigation, from the bench.

“This is not a generic case but a specialised case where frequent changes in the bench will lead nowhere as the new bench will yet again have to understand the jargon from the scratch,” one of the victims said.

On September 13, the Court extended Bhardwaj’s interim protection from arrest. The next hearing in the case is likely to take place on September 27.

ED’s Affidavit In The Supreme Court

Besides Pune Police who are investigating the case since 2017, the ED is investigating the case since 2019. In the last nine months since the death of Amit Bhardwaj, his brother Ajay Bhardwaj has appeared before the ED eight times during February and March this year. Earlier, despite receiving at least four summons from the agency, Ajay Bhardwaj did not appear before it.

Inc42 has accessed the affidavit the ED submitted to the Supreme Court. The anti-money laundering agency has alleged that Bhardwaj gave contradicting statements and lied multiple times.

For instance, in a statement on March 9, 2022, Bhardwaj said that he never dealt in cryptocurrencies. However, he changed his statement on March 15 after being shown his cryptocurrency transaction details through Zebpay account, and admitted that he bought cryptocurrencies.

Similarly, on March 7, he said that he was not a director in any company other than Variable Tech and Norton Facility Management company. However, on further interrogation on March 15, he said that he was also a director of Radox Infotech and Norton Sales.

Over 35 companies are so far found directly or indirectly associated with Amit Bhardwaj and his family. Bhardwaj brothers said to have used these companies for luring people towards Bitcoin investments, for evading FEMA and for running GainBitcoin and similar operations worldwide.

The ED, in the affidavit, has said that Bhardwaj not only lied but also tried to ‘mislead’ the investigation.

The ‘Compromised’ Investigation

From the very beginning, the case has been shrouded in mystery, with investigating agencies facing allegations of ‘compromising’ the investigation. Since Amit Bhardwaj was arrested in March, 2018, investigating agencies have not been able to exercise due vigilance. And, as a result, Bhardwaj and the other sixteen main accused who were also arrested by different state police departments across the country were granted bail by different courts, one after another.

The Pune Police had recovered one Trezor wallet from the late Amit Bhardwaj. It was supposedly sent to the Maharashtra government’s Forensic Science Laboratory (FSL). However, the lab found that there were assets of some other case in it under the name of GainBitcoin case.

The Pune police currently don’t know who took the actual Trezor wallet away. In an audit, several questions have been raised, including who performed the task of wrapping and packing the wallet and then sent it to the FSL.

The Pune Police has already arrested cybercrime expert Pankaj Ghode and former IPS officer Ravindra Patil who initially assisted it in the case. The duo are accused of taking away Bitcoins from some of the wallets recovered by the Police earlier.

Meanwhile, SI Navin Phogat of Chandigarh Police, who was investigating the GainBitcoin case, allegedly took a bribe of INR 30 Lakh to save Sanchit Alagh, one of the accused in the case, according to a report submitted by DSP Rashmi Yadav. Subsequently, Phogat was suspended.

With the ED now trying to give the case to the CBI, the victims fear that it might compromise the investigation further as the latter is not trained to deal with these types of cases. Besides, there are chances of further destruction of evidence with more delays in the case.