ED Arrests Man In Cryptocurrency Scam Amounting Rs 6,000 Crore

The Enforcement Directorate (ED) apprehended Nitin Gaur on Friday in connection with a cryptocurrency case amounting to Rs 6,606 crore against M/s Variable Tech. The case pertains to the GainBitcoin Ponzi scheme, involving the company and its promoters. Nitin Gaur is the brother-in-law of Ajay Bhardwaj. The arrest was carried out under the Prevention of Money Laundering Act (PMLA). 

The ED launched an investigation following multiple FIRs filed by the Maharashtra Police and Delhi Police against the company, its late founder Amit Bhardwaj, and other family members, including Ajay Bhardwaj, Vivek Bhardwaj, Simpy Bhardwaj, and Mahender Bhardwaj, along with several multi-level marketing (MLM) agents. 

The accused are alleged to have deceived investors by collecting substantial amounts of Bitcoin, valued at Rs 6,606 crore in 2017, promising monthly returns of 10 per cent in the form of Bitcoins. These funds were ostensibly meant for Bitcoin mining operations, with the assurance of significant crypto-asset returns. However, the promoters are accused of defrauding investors and concealing the unlawfully obtained Bitcoins in anonymous online wallets. 

Through the use of blockchain technology, investigations revealed that Nitin Gaur knowingly received the proceeds of crime in his cryptocurrency account on the Binance exchange from a wallet controlled by Ajay Bhardwaj. The ED investigation disclosed that Gaur actively assisted Ajay Bhardwaj in concealing and layering the illicit proceeds generated through this fraudulent scheme. 

Following a search operation at Gaur's residence on 29 December, he was arrested and brought to Mumbai on transit remand. Subsequently, he was presented before the PMLA Special Judge in Mumbai on 30 December, who granted ED custody for custodial interrogation until 6 January 2024. 

Additionally, the ED conducted searches at the premises of suspected hawala operators linked to the GainBitcoin scam promoters. It was revealed that several crypto traders were converting cryptocurrencies like Bitcoin, Ethereum, USDT, and Tron into Indian Rupees without proper accounting, indicating potential involvement in money laundering. These traders have been summoned by the ED for questioning. 

The investigation unveiled that the accused promoters were adept at crypto-asset transactions, utilising fake KYC documents, VPNs, and other methods for complex transactions like mixing, swapping, and peer-to-peer exchanges to conceal their criminal proceeds. 

During the search operation, authorities seized Rs 16.7 lakh in cash and various digital devices. While the main accused, Ajay Bhardwaj and Mahender Bhardwaj, remain at large, Simpy Bhardwaj, arrested by the ED on 17 December, is currently in judicial custody. 

The ED has attached properties worth Rs 69 crore and is seeking international cooperation in the case. Further investigation is ongoing.