Indian Bitcoin guru arrested for ₹2000 crore ponzi scheme

The man responsible for GBMiners, the venture which brought about bitcoin mining to India, has apparently been arrested for scamming investors out of ₹2,000 crores. That too, within Maharashtra alone. Amit Bhardwaj, one of the biggest names in the digital currency diaspora, was brought into the country after being in hiding for over a year. His brother, Vivek Bharadwaj was also arrested.

This is the first enforcement case investigation report (ECIR) to submitted in India under the Prevention of Money Laundering Act (PMLA) in Mumbai. Others included in the ECIR are Ajay Bhardwaj, Rupesh Singh, Hemant Chauhan, Hemant Suryavanshi and, Kaka Ravde. And that’s not even the whole list.

Action was taken jointly by the Reserve Bank of India (RBI), the Enforcement Directorate (ED) and the Cybercrime Cell of Pune Police. It’s surprising that the case came to light in the first place, since most the investors were reluctant to come forward, as their investments fell outside the realm for what would strictly be considered to be ‘legal’. In fact, it was Parvendra Singh, a businessman from Nanded, who first filed a complaint and came forward to address the issue.

Bhardwaj allegedly used his position as a cryptocurrency entrepreneur to cheat investors out of money using Bitcoin-based Ponzi schemes. Though the figure stated for Maharashtra is ₹2,000 crores, officials told India Today that the scam could actually be anywhere between ₹5,000 crores and ₹13,000 crores.

Using his connections in Bollywood, Bhardwaj got well known faces like Shilpa Shetty, Neha Dhupia and Huma Qureshi to endorse his book, Cryptocurrency for Beginners. Building his reputation from that, he continued to woo middle-class investors into investing using a multi-level marketing (MLM) model.

His first foray into the world of bitcoin included launching HighKart, the first bitcoin based online retailer in India. Other than GBMiners, his ventures also include GainBitcoin, MCAP and GB21.