Indian AML Watchdog, Enforcement Directorate (ED) has attached assets worth ₹98 crore (Approximately $11 Million) in a Bitcoin Ponzi scheme. The seized assets include a Pune bungalow and equity shares, as part of a money laundering investigation involving Raj Kundra, businessman and husband of Bollywood actor Shilpa Shetty.
Kundra, who was previously arrested by the Mumbai Police in July 2021 for his alleged involvement in a pornography-related case, is now under the ED’s scrutiny for his role in siphoning off investor funds through Bitcoins.
What is the Gain Bitcoin Ponzi Scheme?
The Raj Kundra Bitcoin Ponzi case centres around a massive ₹6,600 crore investment fraud associated with a scheme called ‘Gain Bitcoin’. The Gain Bitcoin scheme, launched in 2017, is one of the largest cryptocurrency frauds in India, amounting to a staggering ₹6,600 crore. Amit Bhardwaj and his associates orchestrated it through Variable Tech Pte Ltd.
‘Gain Bitcoin’ lured investors with promises of a 10% monthly return in bitcoins. The scheme was orchestrated by a group led by Amit Bhardwaj, who convinced investors to contribute funds with the promise of high returns through Bitcoin mining.
Initially, returns were paid to early investors using capital from new investors, a classic hallmark of a Bitcoin Ponzi scheme. As the scheme progressed, the payouts ceased when the influx of new investors slowed down, leading to defaults on the promised returns.
The masterminds behind the Gain Bitcoin Ponzi scheme then diverted the collected funds into bitcoins and concealed them in obscure online wallets, away from the reach of investors and authorities. The scheme came to light when victims started filing complaints, leading to multiple FIRs and a subsequent investigation by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA).
Raj Kundra Involvement
According to the ED, Raj Kundra received 285 Bitcoins from Amit Bhardwaj, the mastermind behind the Ponzi scheme, to set up a Bitcoin mining farm in Ukraine. The ED claims that Kundra still possesses these bitcoins, valued at over ₹150 crore.
As part of the investigation, the ED has attached properties, including a residential flat in Mumbai’s Juhu area registered under Shilpa Shetty’s name, a bungalow in Pune under Raj Kundra’s name, and equity shares owned by Kundra.
A provisional attachment order has been issued under the Prevention of Money Laundering Act (PMLA) to attach these properties worth ₹97.79 crore. While Kundra is not the main accused in the case, the ED’s actions highlight the severity of financial crimes and the government’s commitment to combating money laundering and illicit activities involving cryptocurrencies.
