India’s probe agency, the Directorate of Enforcement (ED), has arrested Nitin Gaur, the brother-in-law of Ajay Bhardwaj, in connection with the multi-billion-dollar GainBitcoin Ponzi scam.
This arrest is part of the ongoing investigation into the cryptocurrency fraud case involving M/s Variable Tech Pte Ltd and its promoters.
Under the Prevention of Money Laundering Act (PMLA), Gaur faces charges related to his alleged involvement in concealing and layering the proceeds of crime generated through the GainBitcoin Ponzi scheme.
Earlier, the Supreme Court of India, responding to a petition filed by Ajay Bhardwaj, directed a CBI investigation into the case. Simultaneously, the court instructed the ED to persist with its ongoing inquiry under the Prevention of Money Laundering Act (PMLA), 2002.
The investigation into the crypto Ponzi scam reignited after significant movements were discovered from one of the main accused in the scam – Ajay Bhardwaj. GainBitcoin, the fraudulent scheme, collected hundreds of thousands of Bitcoins, promising monthly returns of 10%.
These funds were ostensibly for Bitcoin mining operations, but investigations have uncovered a web of deception, with the promoters allegedly hiding ill-gotten Bitcoins in anonymous online wallets. It has been alleged that GainBitcoin amassed around 20,000 crore INR ($2.4 billion) in Bitcoin from victims.
GainBitcoin Collected Hundreds of Thousands Bitcoins
The ED’s inquiry, based on FIRs filed by both Maharashtra and Delhi Police, targets family members, including Ajay Bhardwaj, Vivek Bhardwaj, Simpy Bhardwaj, and Mahender Bhardwaj, along with several multi-level marketing (MLM) agents.
ED revealed that Nitin Gaur knowingly received proceeds of crime in his Binance exchange cryptocurrency account from a wallet controlled by the mastermind Ajay Bhardwaj. Gaur actively assisted Ajay in the illicit financial maneuvers associated with the Ponzi scheme.
Nitin Gaur is the brother of Simpy Bhardwaj, who was arrested last month after the probe agency raided her residence. Simpy is still under judicial custody.
ED Intensifies Investigation into the India’s Largest Crypto Ponzi Scam
Gaur’s arrest followed a search operation at his residence on December 29, and he was subsequently brought to Mumbai for further proceedings.
The PMLA Special Judge in Mumbai granted ED custody for custodial interrogation until January 6, 2024.
Simultaneously, the ED conducted searches at premises linked to suspected hawala operators associated with GainBitcoin scam promoters. Revelations surfaced regarding crypto traders converting various cryptocurrencies into Indian Rupees without proper accounting, hinting at potential money laundering. These traders have been summoned for questioning.
The GainBitcoin investigation also exposed the accused promoters’ adeptness in crypto-asset transactions, utilizing fake KYC documents, VPNs, and intricate methods like mixing, swapping, and peer-to-peer exchanges to camouflage their criminal proceeds. Main accused Ajay Bhardwaj and Mahender Bhardwaj continue to remain at large.
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