The Enforcement Directorate (ED) arrested Nitin Gaur on Friday in connection with a cryptocurrency case worth Rs 6,606 crore against M/s Variable Tech. The case belongs to the GainBitcoin Ponzi scheme, which involves the company and its promoters . Nitin Gaur is the brother-in-law of Ajay Bhardwaj. The arrest was carried out under the Prevention of Money Laundering Act (PMLA).
The ED launched an investigation following multiple FIRs lodged by the Maharashtra Police and Delhi Police against the company, its late founder Amit Bhardwaj and other family members including Ajay Bhardwaj, Vivek Bhardwaj, Simpy Bhardwaj and Mahender Bhardwaj, along with several multi-level marketing (MLM) agents.
The accused are alleged to have misled investors by collecting substantial amounts of Bitcoin, valued at Rs 6,606 crore in 2017, by promising monthly returns of 10 percent in the form of Bitcoins. These funds were apparently intended for Bitcoin mining operations, with the guarantee of significant crypto asset returns. However, the promoters are accused of defrauding investors and hiding illegally obtained Bitcoins in anonymous online wallets.
Using blockchain technology, investigations revealed that Nitin Gaur knowingly received the proceeds of crime into his cryptocurrency account on the Binance exchange from a wallet controlled by Ajay Bhardwaj. The ED investigation revealed that Gaur actively helped Ajay Bhardwaj in concealing and stratifying illicit income generated through this fraudulent scheme.
Following a search operation at Gaur's residence on December 29, he was arrested and taken to Mumbai on remand. Subsequently, he was produced before the special PMLA judge in Mumbai on December 30, who granted custody to ED for custodial interrogation till January 6, 2024.
Additionally, the ED conducted searches at the premises of suspected hawala operators linked to the promoters of the GainBitcoin scam. It was revealed that several cryptocurrency traders were converting cryptocurrencies such as Bitcoin, Ethereum, USDT and Tron into Indian rupees without proper accounting, indicating possible involvement in money laundering. These traders have been summoned by the Emergency Department for questioning.
The investigation revealed that the accused promoters were experts in crypto asset transactions, using fake KYC documents, VPNs and other methods for complex transactions such as mixing, swapping and peer-to-peer trading to conceal their criminal profits.
During the search operation, authorities seized Rs 16.7 lakh in cash and several digital devices. While the main accused, Ajay Bhardwaj and Mahender Bhardwaj, remain at large, Simpy Bhardwaj, arrested by the ED on December 17, is currently in judicial custody.
The ED has attached properties worth Rs 69 crore and is seeking international cooperation in the case. More research is being done.
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