With the arrest of Amit Bhardwaj, several new bitcoin-based ponzi scams are coming to light. Cyber cell of Delhi Police has arrested founders of bits2btc Kamal Singh and Vijay Kumar for duping 2,500 people for over Rs 100 crore.
The duo allegedly along with their third partner – SS Alagh had strong links with Bhardwaj and his company Gainbitcoin. During the investigation, police found that the trio had played important role in operations of Gainbitcoin.
Importantly, they were also running a cryptocurrency mining unit in Dehradun for minting Ethereum coins. Like Gainbitcoin, the trio used to lure investors by promising an unviable return on invested amount. In fact, they have gone a step ahead by promising payout twice every month.
The irresistible offer had made several thousand people trapped into multi-level marketing (MLM) scheme. MLM scheme primarily asks enrolled members to get on board a fixed number of people to invest, which gives them a cut or commission.
Interestingly, they had also launched their own currency — HBX and Mcap. The company used to throw parties in lush five-star hotels in NCR region to woo investors.
Meanwhile, police has been conducting raids in Delhi and Uttar Pradesh (UP) to nab Alagh. Following the arrest of Singh and Kumar on April 25, police interrogation revealed that they had invested money made through scam in mining rig of crypto coins in Dehradun.
Police has recovered over 100 Ethereum rigs during the raid along with high-powered computer processors, servers and 500 graphics cards in Dehradun.
Last month, notable entrepreneur and angel investors Nikunj Jain and Sahil Baghla were arrested on the grounds of having key connections with Bhardwaj and his company.
The duo was allegedly a part of the conspiracy and working as partners with Bhardwaj. They built the portal – GBMiner, a BTC payment gateway, and mining pool. These entities were used by Bhardwaj in the scam.
In a separate case, the Delhi Police had arrested Bitmineplus founders for allegedly duping 5,000 people through a Bitcoin-based scam. Interestingly, the duo from Sonipat had claimed to have drawn inspiration from Bhardwaj’s firm GainBitcoin.
The news was first reported by TOI.