India’s Central Bureau of Investigation (CBI) has busted the GainBitcoin scam, bringing a tech firm dubbed Darwin Labs in the centre of the scam. What the CBI is calling a multi-thousand crore crypto scam, reportedly caused losses worth $2.17 billion (roughly Rs. 20,000 crore) to over 8,000 investors.
In an official statement shared on Wednesday, the CBI said that GainBitcoin was a ponzi scheme that lured investors into participating in it on the promise of getting big returns in exchange.
While the CBI did not disclose the exact loss amount that this scam caused its victims, national publications reported the $2.71 billion figure. The CBI has neither confirmed nor denied the reported figures.
Darwin Labs co-founders Ayush Varshney, Sahil Baghla and Nikunj Jain have been accused of misappropriating funds received from the investors.
The three allegedly designed and deployed the MCAP crypto token and its corresponding ERC-20 smart contract.
“Darwin Labs Private Limited was instrumental in developing the entire technological infrastructure of the fraudulent scheme including Bitcoin mining pool platform GBMiners.com, BitCoin Payment Gateway, Coin Bank BitCoin wallet and the Gain BitCoin investor facing website,” the CBI said in its announcement.
The investigation on Darwin Labs was ordered by the Supreme Court in December 2023. Several FIRs, the CBI said, were filed naming the GainBitcoin scheme in the complaints, which were handed over to the CBI for probe.
Last week on March 6, Varshney was identified as trying to fee India from the Mumbai airport. The immigration authorities handed over his custody to the CBI, which officially arrested him on Tuesday.
“Investigation in the case is continuing. The CBI remains committed to conducting a comprehensive and impartial investigation into the GainBitcoin scam and bringing the perpetrators to justice,” the statement from CBI noted.
In India, crypto holding and trading is legal. The country, however, is yet to finalize its crypto laws.
The CBI and the Enforcement Directorate (ED) have been tracing similar scam schemes in the country with many having made to the headlines in recent times. The BitConnect scam, the Morris Coin scam are among recent scam busts that were reported from India.