Bitcoin mining scam mastermind, Amit Bhardwaj is being interrogated by Delhi police. He was allegedly involved in a Rs.20 billion scam in India. The officials fear that his sophisticated digital currency racket could just be a ‘tip of the iceberg.’ This was not the only case in India that investigators are looking to get the truth. Last week too, the police had found another cryptocurrency racket managed by two men from North India. This involved about 5,000 investors. Their objective is to take advantage of the growing virtual currency market despite a slump in prices.
On April 5, police arrested Bhardwaj for duping thousands of people over a three-year period. After fleeing India, he has been on the run for close to eight months. This forced the Enforcement Directorate to resort to a lookout notice against him, Scroll reported. Though he was found at the Dubai airport late last year, he managed to escape from the police trap. He allegedly staged a drama of facing a heart attack only to flee to Bangkok.
Following this, the security agencies in Thailand has alerted Indian police about Bhardwaj plan to travel to Delhi. When he landed at the airport, the police have arrested him. Since most of the complaints against him are registered in Pune, he is currently held by police there. Crime Branch Deputy Commissioner of Police, Bhisham Singh, said that it would seek his custody from the concerned court. He is facing two separate cases in Delhi and will be interrogated in respect of those cases.
In 2014, Bhardwaj launched his own first online retail marketplace after leaving a big IT firm. The company started accepting bitcoin. However, that venture failed to click, and that did not deter him from starting new ventures. That landed in establishing a number of bitcoin mining companies like GB Miners, Gain Bitcoin, and MCAP. He started duping investors through these companies.
In January, police in Delhi and Mumbai have found a dozen rackets that duped people on the promise of investing in digital currencies. Investors’ awareness about the cryptocurrency was very little. As a result, in most of the cases, they came to know about it only through the significant increase in bitcoin value. However, they were not aware that their investments were in mined virtual currencies, which had no worth.
Sophisticated Game Plan
Reports suggested that Bhardwaj’s game plan was a sophisticated one and that he knew the business. An architect and investor of Gain Bitcoin told the media that “His idea was simple but technically strong. Individual Bitcoin mining would yield fewer rewards. So, his idea was to pool resources for collective mining of Bitcoins, generating potentially higher returns. The investment too was to be done in Bitcoins, and the return was supposed to come in Bitcoins, at a rate of 10% per year for 18 months. But the returns never came.”
Another investigator indicated that the initial idea was a collective investment in bitcoin mining. But he started more companies later to operate from multi-level marketing scheme. This invited investors’ to suspect.