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Indian Authorities Seek Details Of Bitcoin Theft During Investigation
The Supreme Court on Monday pulled up Ajay Bhardwaj, the accused in the Gain Bitcoin scam, for not complying with its direction to divulge details of the username and password of cryptocurrency wallets to the Enforcement Directorate (ED).
Ankita K.
1:22 19th Apr, 2022

Two private investigators allegedly stole 1,137 bitcoins from the wallet of the key accused during the probe into a bitcoin MLM fraud.

As per media reports, ED officials visited the office of Pune’s Commissioner of Police in the Maharashtra province last Saturday and collected some information about the crime.

The case pertains to two private cryptocurrency detectives allegedly transferring 1,137 bitcoins while investigating a fraud where they were assisting the Pune police. Earlier reported the arrest of Pankaj Ghode, a cryptocurrency expert, and Ravindra Patil, an Indian Police Service (IPS) officer who had taken voluntary retirement and was working as a private digital asset investigation expert.

The case in which Ghode and Patil were assisting the police relates to a cryptocurrency scam registered in 2018 involving 87,000 bitcoins and at least 8,000 investors. According to the ED’s estimates, these bitcoins at the current market rate would be worth Rs. 20,000 crore ($262.3 million).

As reported this case as well, where the key accused, Amit Bhardwaj, was charged by the ED with running a multilevel marketing (MLM) scheme called GainBitcoin. According to the scheme, GainBitcoin was to offer a 10% monthly return on bitcoin investments.

India’s financial crime investigation agency Enforcement Directorate (ED) has sought the help of police in a case of bitcoin theft worth Rs. 6 crores ($790,000) by the investigators who were assisting the police in a crypto fraud case worth over $260 million.    

Stealing of Bitcoin During Investigation

According to the First Information Report (FIR) lodged by the Pune Police, the police engaged Ghode and Patil to recover bitcoins from Amit Bhardwaj’s e-wallet. For this purpose, the necessary information was taken from Bhardwaj and passed on to the two private investigators.

But instead of playing fair, they transferred 1,137 bitcoins to their wallets and gave the police fudged screenshots of Bhardwaj’s wallet. Higher police officials were able to pinpoint the wrong-doing through KYC check of the accused, and a case was registered against them, leading to their arrest.

The ED is pursuing the GainBitcoin case against Amit Bhardwaj and his associates, mostly his family members. As India doesn’t have a law that covers cryptocurrency frauds, crypto crime cases are dealt with under different legislations depending on the nature of the crime. The GainBitcoin case was registered under the Prevention of Money Laundering Act (PMLA), and Amit Bhardwaj is out of jail on bail.

A Long Trail of Crypto Frauds

While India doesn’t have a law specifically to address crypto-related crimes, the reports of investors being cheated by the false promises of high returns on bitcoin investments have been coming pretty regularly.

In one such example, the ED arrested an accused early this month in the infamous Morris Coin case.

The alleged wrong-doer escaped from the country after being granted bail in 2020, following his arrest under lenient sections of the Indian Penal Code. At that time, there were fewer complaints, and the scale of the fraud was fully revealed. As per the estimates, the scam amounted to at least $160 million and involved 900 investors.


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