CBI Arrests Co-Founder of Darwin Labs for Role in Rs 20,000 Crore GainBitcoin Scam

The Central Bureau of Investigation (CBI) arrested Darwin Labs co-founder Ayush Varshney on Tuesday for his alleged involvement in the huge GainBitcoin cryptocurrency scam.

CBI has registered several cases against Darwin Labs and its executives under the Indian Penal Code and the Prevention of Money Laundering.

As per the CBI, Varshney was the main person who was involved in the GainBitcoin scam.

A lookout circular was issued, based on which Varshney was detained at the Mumbai airport on Monday while he was trying to flee the country.

The scam involves a Ponzi scheme started in 2015 by Amit Bhardwaj, his brother and their agents. Under this scam, the investors were promised very high returns, at 10% per month in Bitcoin for 18 months. To attract investors, the promoters organised a promotional program in Dubai and Macau in 2017 and 2018.

Initially, investors were paid Bitcoin, which made the scheme appear genuine. However, by 2017, the company moved the payouts from Bitcoin to its own cryptocurrency called MCAP to hide its losses since it was struggling financially.

As per the CBI, the company encouraged the investors to buy Bitcoin from exchanges and invest it with GainBitcoin through ‘cloud mining’ contracts.

The scam involves 29,000 mined bitcoin, and it is estimated to be worth Rs 20,000 crore.

The CBI alleges that Darwin Labs designed and developed the digital infrastructure through which GainBitcoin was operating.