Synopsis: This article covers the latest development in the investigation into the Rs 20,000 crore GainBitcoin cryptocurrency scam India’s largest alleged crypto fraud following the CBI’s first major arrest in the case.
The Central Bureau of Investigation (CBI) has made its first major arrest in one of India’s largest cryptocurrency fraud cases, a scam involving approximately 29,000 Bitcoins worth an estimated Rs 20,000 crore.
The Arrest: Accused Caught Fleeing the Country
Ayush Varshney, co-founder and Chief Technology Officer of Darwin Labs Private Limited, was detained at Mumbai’s Chhatrapati Shivaji Maharaj International Airport while attempting to board a flight to Colombo, Sri Lanka. A Look Out Circular had been issued against him, alerting immigration officers to intercept him before he could leave the country. He was formally arrested and handed over to the CBI the following day.
According to the CBI, Darwin Labs designed and developed the digital infrastructure that formed the operational backbone of the alleged fraudulent enterprise GainBitcoin. Investigators found that Darwin Labs and its co-founders including Varshney, Sahil Baghla, and Nikunj Jain were involved in designing and deploying a cryptocurrency token known as MCAP along with its associated ERC-20 smart contract.
The company also helped develop key components of the platform’s technical infrastructure, including the GBMiners.com mining pool, a Bitcoin payment gateway, the Coin Bank Bitcoin wallet, and the GainBitcoin investor website.
Origins of the GainBitcoin Scheme
The GainBitcoin scheme was launched in 2015 by Amit Bhardwaj and his brother Ajay Bhardwaj through Variabletech Pte. Ltd., a Singapore-registered entity that operated websites including gainbitcoin.com, along with related platforms such as GBMiners and GB21.
The programme promised investors monthly returns of around 10% in Bitcoin for a period of up to 18 months, encouraging them to purchase Bitcoin from external exchanges and deposit it with the platform through “cloud mining” contracts. FinanceFeeds
How the Scheme Operated
The model followed a multi-level marketing (MLM) structure, commonly associated with pyramid-structured Ponzi schemes, where payouts were dependent on bringing in new investors. In its early days, investors received payouts in Bitcoin, creating the illusion of a lucrative venture. However, as new capital dwindled by 2017, the scheme began to unravel.
In an attempt to cover up the losses, GainBitcoin unilaterally switched payouts to its in-house cryptocurrency called MCAP, which had significantly lower value than Bitcoin, further misleading investors.
The case is being investigated under Sections 120B, 406, and 420 of the Indian Penal Code (IPC) and Section 66 of the Information Technology Act, 2000.
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Nationwide Raids and Supreme Court Intervention
The sheer scale of the scam resulted in the registration of multiple FIRs, spanning from Jammu and Kashmir to Maharashtra and from Delhi to West Bengal.
In February 2025, the CBI conducted extensive searches at over 60 locations across India, including Delhi-NCR, Pune, Chandigarh, Nanded, Kolhapur, and Bengaluru. The Supreme Court had previously decided to consolidate all related cases and transfer the investigation to the CBI given the operation’s scale and international dimensions.
Key Accused and Asset Seizures
The main accused, Ajay Bhardwaj and Mahendra Bhardwaj, remain absconding. The Enforcement Directorate (ED) has attached properties worth Rs 69 crore and has sought assistance from foreign authorities to trace the proceeds of the crime.
In April 2024, the ED also attached immovable and movable properties worth Rs 97.79 crore belonging to businessman Raj Kundra in connection with the case. The attached assets included a flat in Juhu registered in his wife’s name, a bungalow in Mumbai, and certain equity shares.
The ED’s investigation also revealed that cryptocurrencies including Bitcoin, Ethereum, Tether (USDT), and TRON were used to carry out hawala transactions, involving complex national and international crypto hawala operations linked to the GainBitcoin promoters.
Investigation Ongoing
The CBI has confirmed that the investigation is still active. With Varshney now in custody, officials believe his technical knowledge and access to Darwin Labs’ systems could help uncover the full extent of the fraud, trace misappropriated funds across borders, and identify additional individuals involved in the scheme. Further arrests are expected as the probe continues.
Written by Parvati Anilkumar
