Amit Bhardwaj, the Ponzi scheme kingpin accused of scamming thousands by promising outlandish returns on investments in Bitcoins, has offered to pay back investors their initial investments in Indian rupees even as one of the country’s largest cryptocurrency exchanges, Zebpay, has been roped in to help with the investigation.
What Was Bharadwaj's Ponzi Scheme?
Over the past few years, Bitcoin Ponzi mastermind Bhardwaj amassed wealth equivalent to the GDP of a small nation duping thousands of investors lured in by the promise of quick riches mining cryptocurrencies. He was arrested in April this year by the Pune police cybercrime division from Delhi.
The arrest was the result of a chain reaction set off by a Calling Attention notice in the Maharashtra state assembly by Rahul Kul of the Rashtriya Samaj Paksha who brought the matter into notice. In reply to the notice, the state’s minister of state for home Ranjit Patil had said that his government would ask the Enforcement Directorate, the central agency fighting economic crime, to probe allegations that Bhardwaj and his company GainBitcoin had swindled investors through its Bitcoin Ponzi schemes.
Since the middle of 2015, more than Rs 1,000 crore (~US$146 million) is estimated to have been invested in the Bhardwaj-led Gainbitcoin empire.
How Is Zebpay Involved?
Jayram Paygude, the inspector at Pune Cyber Crime Cell said, “Zebpay is the platform through which investment and sale of bitcoins were done in this case, which is why they were called for an inquiry.” Hence, Zebpay, despite being the largest and the most popular crypto exchange operating in India, has come forward to lend its helping hand in the investigation.
What The Victims Have To Say?
An anonymous victim stated,
“The Pune police and Kolkata police have been trying to figure out cryptocurrency and blockchain experts to help them with the case. They have some people who are consulting them in this regard but, even then, he (Bhardwaj) is citing technical difficulty as the reason for his business going into a loss.”
“Bhardwaj is telling the cops that he did not foresee the mining difficulty of Bitcoin increasing so he was unable to keep up with the payouts to investors and that is why he has a loss in business.”
This source said Bhardwaj lawyers have been citing notifications by the Reserve Bank of India citing risks involved in investing in virtual currencies or cryptocurrencies as grounds for his client to be granted bail or let off the case. Investors should have known the risks of investing in Bitcoins, goes the reasoning.
Shilpa Shetty, a prominent Bollywood actress, and her husband, Raj Kundra have also been summoned by the Enforcement Directorate. These personalities may have had links with the case, and hence, they have been summoned for investigation.