Two Arrested For Duping 2.5K People For Rs 100 Cr Through Bitcoin Scam, Links Traced Back To Amit Bhardwaj


With the arrest of notorious 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, as reported by Times of India.


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.

They were also running a cryptocurrency mining unit in Dehradun for minting Ethereum coins. Similar to Gainbitcoin, the trio used to lure investors by promising an unviable return on invested amount. They had even promised a payout twice every month.

The irresistible offer had made several thousand people fall into the trap of 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.

ALSO READ: RBI’s decree will shatter cryptocurrency business in India, say stakeholders

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 have been conducting raids in Delhi and Uttar Pradesh (UP) to nab Alagh. After the arrest of Singh and Kumar on 25 April, police interrogation revealed that they had invested money made through scam in mining rig of crypto coins in Dehradun.

Police had recovered over 100 Ethereum rigs during the raid along with high-powered computer processors, servers and 500 graphics cards in Dehradun.

Other cases

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. The duo from Sonipat had claimed to have drawn inspiration from Bhardwaj’s firm GainBitcoin.

In yet another case, CoinSecure, an Indian cryptocurrency exchange, said nearly Rs 20 crore were stolen from its bitcoin wallet, according to media reports.

The Reserve Bank of India has already barred banks from facilitating trade on virtual currencies and mandating them to unwind their existing relationship with exchanges within three months.

But experts feel that pushing the exchange business out from the formal economy to the informal cash economy to operate under the radar will only worsen the problem.

Asia, Vietnam and South Korea have also suffered millions of dollars worth of fraud and embezzlement in some of the cryptocurrency businesses. Earlier this year, one of Japan’s cryptocurrency exchanges was hit by a daring $530 million theft of digital money.

ALSO READ: Your bank will not allow you to buy bitcoins anymore