Bitcoin fraud: Director of firm involved in Rs 2000 crore scam arrestedhttps://indianexpress.com/article/india/bitcoin-fraud-amit-bhardwaj-director-of-firm-involved-in-rs-2000-crore-scam-arrested-5124244/

Bitcoin fraud: Director of firm involved in Rs 2000 crore scam arrested

The police have said that Amit Bhardwaj had set up an elaborate Multi-Level marketing scam by luring investors to hand him bitcoins in the promise of higher returns. Under his scheme, investors were asked to invest one bitcoin for a ten per cent return.

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The Delhi Police say that Amit Bhardwaj introduced the first online retail marketplace accepting bitcoin in the country in 2014.

Amit Bhardwaj, the bitcoin entrepreneur who started his own bitcoin mining operations and duped more than 8,000 people to the tune of Rs 2,000 crores from across the country has been arrested from the Delhi Airport by the Pune Police. The move comes after the Pune police had arrested seven persons associated with Bhardwaj and located him at Bangkok.

The Delhi Police say that Bhardwaj introduced the first online retail marketplace accepting bitcoin in the country in 2014. He owns a chain of bitcoin mining operations notable among them are Gain bitcoin- which claims to have set up bitcoin mining operations in China, GB Miners, located in Hong Kong and the recently launched, MCAP.

Confirming the arrest, Pune Police Commissioner, Rashmi Shukla said, “ Amit Bhardwaj was arrested from the Delhi Airport today”. Sources have said that the Pune Police was tipped off by local Bankok agencies pertaining to Bhardwaj’s location in the country.

The police have said that Bhardwaj had set up an elaborate Multi-Level marketing scam by luring investors to hand him bitcoins in the promise of higher returns. Under his scheme, investors were asked to invest one bitcoin for a ten per cent return. The contract would be valid for eighteen months. Bhardwaj also offered another option where he promised to facilitate bitcoin mining hardware to the investors, who may then mine their won bitcoins. However, he never gave the returns and instead fled the country, police said.

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Four years after Bhardwaj had set up his bitcoin mining operations, the Enforcement Directorate (Mumbai) had issued a lookout notice for him after he fled the country. The police say that Bhardwaj had duped investors in Mumbai, Pune, Nanded, Kolhapur and other cities in the state. Three cases of Bitcoin MLM were registered in Pune, two in Nigdi and one in Dattawadi police stations.

In the case lodged at Nigdi police station, Bhimsen Baburam Aggarwal, a resident of Pradhikaran named six suspects including Amit Bhardwaj and Ajay Bhardwaj, both directors of Gain Bitcoin. Aggarwal had invested Rs one crore in Gain Bitcoin for 93.5 bitcoins.

The Delhi Police Crime Branch officers had earlier told The Indian Express that Bhardwaj had fled the country and was now operating out of Dubai. “He has set up an office in Dubai and continues with his operations. We currently do not have a single FIR against Bhardwaj in our unit. A case has been registered in Prashant Vihar,” said Deputy Commissioner of Police (Cyber and FICN) Bhisham Singh.

Kislay Chaudhary, a Delhi based cyber expert who advises the Delhi Police on cybercrime said that Bhardwaj had set up his own mining servers thereby bypassing the transaction cost. “He did not have to pay the transaction costs. In many bitcoin frauds the accused deals in bitcoins. In this case, Bhardwaj went a step further and set up his own mining operations outside the country and came up with his own servers,” Kislay said.

Bhardwaj had started his bitcoin operation from Shalimar Bagh in Delhi and eventually spread to mining operations based out in China and started to lure investors through a referral scheme. “Every investor is offered incentives on a commission basis to enrol other investors. They were promised high returns on their investment,” Singh said.

Zakhil Suresh, a cryptocurrency analyst based out in Mumbai, was one of the first to call out Bhardwaj’s false claims. Suresh, told The Indian Express, that he had started a petition to arrest Bhardwaj and also sent them to the Delhi Police and Mumbai Police Commissioner.

Suresh had met Bhardwaj in Delhi in June 2015 and invested six bitcoins to the tune of Rs one lakh. “Bhardwaj had promised to pay .01 to .02 bitcoins every month. He said that in his platform there is no transaction cost. We had no reason to suspect him because he was seen as a bitcoin revolutionary,” Suresh said.

However, the returns never made it to his e-wallet accounts. “I kept sending emails to his company and they would not revert. My wallet status was pending for months and later the status turned to closed,” Suresh said. This was when he knew that Bhardwaj had allegedly duped him. But Suresh never registered an FIR in the case. “I grew tired of it. I did not know about the provisions. He then started MCAP, his own bitcoin currency introducing his own exchange rates. There was complete manipulation of the exchange rates and he offered his own crypto currency. We gave up by then,” Suresh said.