The GainBitcoin Ponzi scheme was among the most significant Bitcoin schemes to hit the crypto space.
In addition to stirring up a new round of panic and accusations that the cryptocurrency community ought to be more properly regulated, this Ponzi scheme is linked to another scam which set the stage for the OneCoin MLM scam, which continues to be promoted to this day.
The GainBitcoin scam is not particularly new in its formula; it offers rewards for contributors, as well as a massive ROI, or return of investment, to those who stick with the project and continue to contribute.
The project was initially called out as being a scam by many within the cryptocurrency community, especially those with deep knowledge of how Bitcoin mining and crypto payment methods. In response to these accusations, CEO and founder Amit Bhardwaj continuously dodged questions, remarking on some occasions that he would “personally explain” the complex “maths” behind the success of the user gain patterns named by the operation.
But other experts have been quick to point out some of the cold hard facts which make the project a giant scam. For one, it was clear that a 10% ROI each month for every contributor would be near-literally impossible to sustain.
Even with incredible turnarounds for the cloud mining project, payouts with that rate of return would simply not be viable for a long-term organization to effectively sustain for its patrons.
Bhardwaj is one of the men unmasked as being behind the scam, which went bust and cost investors millions back in the latter half of 2017. Just like watchdog company BehindMLM claimed, the organization was unable to sustain any kind of profit for itself or its contributors and, consequently, it fell into disarray and lost all the funds given by investors over the course of the years that it ran.
Bhardwaj has had a sheet of charges filed against him by Indian authorities, a sheet which includes several counts of very serious fraud and embezzlement.
Aside from his own pending indictment, nine other men and women are being charged with a variety of crimes associated with the running of the multi-million-dollar MLM scam.
To the credit of Indian authorities, they have managed to acquire around 450 Bitcoin that Amit had stolen from investors over the duration of his massive Ponzi scheme operation. This is but a drop in the bucket, unfortunately, compared to the massive $523 million USD that was reported to have been lost by victims of the scam.
This money is an addition to USD $5.9 million of property that the authorities involved in the investigation have already seized from individuals involved in the organization. It is important to remember, though, that the seized amount of 450 Bitcoin would have had a value of an incredible $3.6 million USD back in 2017, when they operation first collapsed.
The investigation has yielded both an exhaustive list of suspects and a partial recovery of existing funds. As it continues, it will be necessary for authorities to recover more funds that were stolen by the nefarious Indian scammers behind GainBitcoin.