Central Bureau of Investigation Cracks Down on Gain Bitcoin Ponzi Scheme, Arrests Ayush Varshney

According to the CBI, all of these individuals collectively created and released a crypto token known as MCAP and its ERC-20 smart contract, which is essentially a crypto Ponzi scheme.

The investigation also revealed that Darwin Labs developed several key digital platforms, including a Bitcoin mining pool platform called GBMiners.com, a Bitcoin payment gateway, a Coin Bank Bitcoin wallet, and the Gain Bitcoin website. These platforms were used to contact investors and facilitate investments.

This scam began in 2015 under the name Gain Bitcoin, which was allegedly operated under the name VariableTech Private Limited. According to the investigating agency, the masterminds of this scheme were Amit Bhardwaj (now deceased) and his brother Ajay Bhardwaj.

Investors were lured by the promise of monthly Bitcoin returns of up to 10% for 18 months. They were asked to purchase Bitcoin from an external exchange and deposit it into Gain Bitcoin through a so-called cloud mining contract.

According to the CBI, this model was a Ponzi scheme based on multi-level marketing (MLM), in which payments to existing investors were made from the proceeds of new investors. Initially, payments in Bitcoin appeared to be profitable.

But after 2017, when the flow of new investors decreased, the company abruptly switched payments from Bitcoin to its own crypto token, MCAP, which was priced significantly lower than Bitcoin. This resulted in significant losses for investors.

This massive scam led to numerous FIRs being filed from Jammu and Kashmir to Maharashtra and Delhi to West Bengal. Given the scale and international implications of the case, the Supreme Court handed over the investigation to the CBI.

The CBI is now pursuing the investigation to unravel the entire scam, identify all those involved, and trace the funds siphoned from investors, including funds sent abroad.