[2018-04-07] $300 Million Bitcoin Scam Unearthed In India

[yndye]

The bitcoin fraudulence around the world don’t seem to cease any time soon, and this time, its struck India. Amit Bhardwaj, director and mastermind of a bitcoin mining company has been recently arrested for setting up an elaborate multi-level marketing scam to the tune of $300 million.

Under this ‘scheme,’ he urged investors to invest one bitcoin for a ten percent return. This ‘contract’ would be valid for a total of eighteen months. Bhardwaj also offered another option where he promised to facilitate bitcoin mining hardware to the investors, who may then mine their own bitcoins. However, he never gave the returns and instead fled the country, police said.

This apparent bitcoin entrepreneur established his own bitcoin mining empire and hoaxed around 8,000 people who corresponded to an astonishing Rs. 2,000 crores ($308 million) of bitcoin from across the country.

But these ‘earnings’ put Bhardwaj into handcuffs. On April 5, he was arrested from the Delhi airport by the police. Before this, seven of his accomplices were arrested in Bangkok.

“Gain Bitcoin”: Shell Company Used To Scam
Bhardwaj was the pioneer of the first online retail marketplace accepting currency in the form of bitcoin in 2014. One of his popular bitcoin mining operations is ‘Gain bitcoin’ – it states that they have bitcoin mining operations in China, GB Miners, located in Hong Kong and the fairly new MCAP.

He was reportedly arrested from the Delhi Airport on April 5, says police Commissioner, Rashmi Shukla. The fact that the police was alerted by local Bangkok agencies about the whereabouts of Bhardwaj’s location in the country. He has allegedly duped investors from Mumbai, Pune, Nanded, Kolhapur and other cities in India.

In an extremely thrifty move, Bhardwaj had set up his own mining servers, completely ruling out the transaction costs that are levied when bitcoins are outsourced from a different mining server.

In this case, “Bhardwaj went a step further and set up his own mining operations outside the country and came up with his own servers,” said Kislay Chaudhary, a Delhi-based cyber professional informed.

Investors Ring Warning Bells
One of the first people to call out Bhardwaj’s wrong-doings was Zakhil Suresh, a cryptocurrency analyst from Mumbai. He had enforced a petition to put Bhardwaj behind bars and also sent them to the Delhi and Mumbai police commissioner.

Narrating his story, Suresh informed that he met Bhardwaj in Delhi in June 2015 and after learning about the terms and benefits of Bhardwaj’s ‘scheme,’ invested a total of six bitcoin that amounted to Rs. One Lakh at the time.

“Bhardwaj had promised to pay 0.01 to 0.02 bitcoin every month. He said that in his platform there is no transaction cost. We had no reason to suspect him because he was seen as a bitcoin revolutionary,” Suresh said.

But sadly, the returns of his investment never saw the light of day. “I kept sending emails to his company, and they would not revert. My wallet status was pending for months, and later the status turned to closed,” Suresh said.

This was when it struck him. He had been deceived. Even then, Suresh did not file a complaint against him. “I grew tired of it. I did not know about the provisions. He then started MCAP, his own bitcoin currency introducing his own exchange rates. There was complete manipulation of the exchange rates, and he offered his own cryptocurrency. We gave up by then,” Suresh said.

https://btcmanager.com/300-million-bitcoin-scam-unearthed-in-india/

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[CryptoBry]

Scams are everywhere online and offline. With the popularity and the potential of Bitcoin to attract new people into scammy programs, many are enticed to use the glitter of cryptocurrency to victimize people into their scheme plans and projects. This has to stop because these are all tarnishing the image of Bitcoin though we have to understand that Bitcoin here has become the medium of exchange just like any fiat money.

[aso118]

This is a classic case of a fraudster taking advantage of the greed of people. A little bit of skepticism would have told people that the returns promised by Bharadwaj are unattainable, no matter what methods he used. If people had googled his name, they would have come across posts highlighting his misdeeds. They still choose to ignore this, go ahead and invest.

[dreamhouse]

lol scams are everywhere around the world.

[Taki]

I do not understand how after all of those Ponzi pyramids, which were blossoming in 90-s and 00-s, people still learn nothing. Now scammers do nit use fiat, but crypto currencies, but the principles stay the same. Thanks God Indian scamming scheme was uncovered fast, but what is going to be with all those people who invested money in it? I doubt that there will be any opportunity to bring back money to each participant to the most low level.

[Slow death]

no offense, but these Indian scammers are on a different level, they are professional at cheating and stealing... they create a good advertising campaign that even the genius of geniuses can fall into temptation and invest money on the promise of high profits.

just look



they are very genius of the scam, these guys are in another level

Thanks God Indian scamming scheme was uncovered fast,

it seems that he was already doing this stealing activity for a long time and the police took time to discover the scheme and arrest the scammer. they have high marketing skills and can convince many people.

[BitHodler]

It's not scams being a huge obstacle here, but the stupid ass people themselves. I find it quite embarrassing to see that after so many similar scam attempts, people still haven't learned anything and continue to invest anyway.

I have been reading about what needs to be done against scams, but that as I said before isn't the problem. The real question is how you can prevent people from harming themselves due to greed or pure stupidity.

In case of stupidity you can say that education and providing enough information is sufficient, but in case of greed there is literally nothing that you can do. People know they invest in scams, but they simply don't care.

These fools think that as long as they are early enough, they can walk out with profits. Killer mentality.

[Rustamm]

This is one of the cases of usual fraud that was previously spread using conventional money so called trust companies. Therefore, this fraud is not inherent for the crypto currency. I think that the banks of India will not use this case to confirm their position about the big risks to which the crypto-currency activity is exposed.

[Kakmakr]

The alarm bells should have been ringing loudly when the investors saw the promised returns on that investment. I have to agree that these people are very clever. I once saw a "Cloud mining" company hosting their "shop"  ...with Bitcoin mining hardware in one of our Malls. They displayed the hardware and used it in their marketing presentation, so everything looked very legit.

I even invested a little amount, to get past the screening phase and then the whole scheme emerged. They use very clever mechanisms to draw in more people and more money and they prey on people's greed. 

Just sad that this is happening, when India is still looking into Crypto currencies. I expect a blanket ban after this soon. 

[Qartersa]

I am all out of words. This is really a huge amount to begin with! Surely closed-minded people will automatically connect this unfortunate event to Bitcoin thereby further destroying Bitcoin to the populace. I am hoping that before people conclude about this, they would look at the bigger picture. Otherwise Bitcoin's reputation will be necessarily tarnished by this.

Anyway, I am just glad that this issue can now lay to rest because of the arrest.

PLEASE TAKE NOTE, THOUGH, THIS SCAM HAPPENS IN ALMOST ALL BUSINESS TRANSACTIONS. THIS IS NOT UNIQUE TO BITCOIN ALONE.