CBI Raids Uncover GainBitcoin Scam's Crypto Trail

India's Central Bureau of Investigation (CBI) has launched a nationwide operation, conducting raids at over 60 locations across the country in connection to the infamous GainBitcoin scam from 2015. The raids, which began on Tuesday, February 25, targeted key suspects, their associates, and related entities in major cities such as Delhi, Pune, Bengaluru, Kolhapur, Chandigarh, and Nanded.

The CBI's press release stated that the raids were aimed at uncovering the laundering of proceeds from the GainBitcoin Ponzi scheme, which allegedly defrauded thousands of victims and amassed ₹6,600 crore ($756.48 million). During the initial raids, the police seized digital evidence, digital devices, crypto wallets, and incriminating evidence found in emails and the cloud.

Following a two-day search, the police confiscated $2.75 million in crypto, along with multiple crypto wallets, 34 laptops and hard disks, 12 mobile devices, and a number of documents, emails, and app messages. The CBI continues to investigate the crime, aiming to uncover the full extent of the fraud, identify all connected parties, and trace misappropriated funds, including international transactions.

The GainBitcoin scheme, launched in 2015 by Amit and Ajay Bhardwaj, promised investors a 10% return on their investments. The scammers instructed victims to buy Bitcoin (BTC) on exchanges and put them in GainBitcoin via cloud contracts. As with typical Ponzi schemes, the scammers paid old investors with money from new investors, keeping much of the funds for themselves. In 2017, GainBitcoin couldn't cover its losses and unilaterally switched payouts to its alleged in-house cryptocurrency, MCAP, further misleading investors.

The arrests began following multiple First Information Report (FIR) filings with the police. In April 2018, the Pune city police confirmed the arrest of eight people in connection to the scheme. The investigation is ongoing, with the CBI committed to bringing the perpetrators to justice and recovering the misappropriated funds.