In a decisive move, the Supreme Court has mandated the Central Bureau of Investigation (CBI) to probe the notorious ‘GainBitcoin Ponzi Scheme’. The Court has also transferred the trial of all the cases related to GainBitcoin to the CBI Court, Rouse Avenue, New Delhi
The directive came during the hearing of GainBitcoin-related cases and follows the court’s disposal of a batch of writ petitions filed by the accused, seeking interim protection and other reliefs, including consolidation of FIRs.
The bench, comprising Chief Justice of India D.Y. Chandrachud, Justices J.B. Pardiwala and Manoj Misra, also rescinded a previous interim order from August 2019 that granted anticipatory bail to the accused. Additionally, the court directed the transfer of INR 1 Cr, deposited by the accused with the Supreme Court registry, along with their passports, to the trial court.
GainBitcoin Case Overview
Floated in 2016-2017, GainBitcoin, a multi-level marketing (MLM) scheme, made grand promises of a highly inflated 10% monthly return on Bitcoin investments.
Spearheaded by the late Amit Bhardwaj, along with his brother Ajay Bhardwaj and other family members, and the so-called second layer of ‘Seven Stars’, the scheme eventually unravelled like all other Ponzi schemes.
It is also pertinent to note that Amit Bhardwaj, the mastermind behind the scam, died of a cardiac arrest in January last year.
An investigation by Inc42 found that the GainBitcoin scam victimised over 1 Lakh individuals. As per the data seized from one of the ‘Seven Stars’, we found a list of 80,000 user IDs of defrauded customers.
Over 46 FIRs have been registered against Amit Bhardwaj and his associates across the country.
This Will Only Delay The Investigation: Victims
The decision to hand over the case to the CBI has sparked a debate, particularly as the allegations involve violations of the Prevention of Money Laundering Act, 2002 (PMLA) and the Foreign Exchange Management Act (FEMA).
Some of the victims argue that the Enforcement Directorate (ED) holds more expertise in such matters, given their jurisdiction and experience in similar cases. Further, “CBI will again start from scratch and the case will be dragged for another six-seven years and more while we have not received a penny. Efforts should have been made to fasten the investigation and not the otherwise,” said one of the victims.
A victim Parvendra Singh Shahoo told Inc42, “The Indian apex agencies should take a clue from their global counterparts on how crypto cases are being investigated and solved. In most cases, the investigators first seize all the crypto and charge a hefty amount to grant bail to the accused.
Expressing dissatisfaction with the current proceedings, victims have urged Indian authorities to learn from global counterparts in handling crypto-related cases. Some victims questioned the competency of the CBI in resolving crypto cases, citing the lack of prior investigations and successful resolutions.
Notably, multiple victims are demanding an explanation as to why the case should not be led by the Maharashtra Police, which has played a leading role in the investigation.
The victims have highlighted the need for stringent measures, akin to global standards, such as seizing crypto assets and imposing substantial bail amounts to ensure accountability.
In response to these concerns, the ED maintains its position that Ajay Bhardwaj, a key figure in the investigation, has not cooperated adequately with the ongoing inquiry.
The complexities of this case underscore the challenges India faces in addressing crypto-related financial crimes and the imperative for a thorough and effective investigative process.
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