New Delhi: The investigation into the widely discussed ‘Gain Bitcoin’ cryptocurrency scam, estimated to be worth around ₹20,000 crore, has reached a crucial stage with the arrest of Darwin Labs co-founder Ayush Varshney. Authorities allege that the digital infrastructure used to operate the controversial Gain Bitcoin investment scheme was developed and supported by Darwin Labs, making the company’s founders key figures in the investigation.
According to officials familiar with the case, Varshney had been under the scanner of investigators for a considerable period. A Look Out Circular (LOC) had already been issued against him earlier. When he allegedly attempted to leave the country, he was intercepted at Mumbai airport and taken into custody. Following questioning, he was formally arrested.
Probe focuses on technical framework
Investigators say that Darwin Labs Private Limited and its co-founders were involved in building the technological ecosystem that supported the alleged crypto investment network. Besides Ayush Varshney, the probe has also identified the roles of Sahil Baghla and Nikunj Jain.
Authorities claim that the group designed a cryptocurrency token called MCAP and developed the related ERC-20 smart contract architecture. This digital framework was allegedly used to run the investment scheme that promised unusually high returns to investors.
During the investigation, officials also found that Darwin Labs had developed several digital platforms linked to the operation. These reportedly included the GBMiners.com Bitcoin mining pool platform, a Bitcoin payment gateway, the CoinBank Bitcoin wallet and the Gain Bitcoin website. These platforms were allegedly used to communicate with investors and facilitate investments into the scheme.
Scheme began in 2015
Investigators say the Gain Bitcoin scheme began in 2015 and was operated under the banner of Variabletech Private Limited. The alleged masterminds of the operation were Amit Bhardwaj and his brother Ajay Bhardwaj.
Investors were promised extremely attractive returns. They were told that if they purchased Bitcoin and invested it through the platform, they would receive monthly returns of up to 10 percent for 18 months.
To participate, individuals were asked to buy Bitcoin through external exchanges and deposit it into Gain Bitcoin through so-called cloud mining contracts offered by the platform.
In the early stages, some investors reportedly received payouts in Bitcoin, which created confidence in the scheme. As a result, more people were encouraged to invest, and the network expanded rapidly.
Old investors allegedly paid using new funds
Investigators believe the scheme operated on a multi-level marketing (MLM) structure. In such arrangements, returns paid to earlier investors often come from funds contributed by newer investors.
According to officials, as long as the number of new investors continued to grow, payouts were maintained. However, the situation began to change around 2017 when the inflow of new participants started declining.
At that point, the operators allegedly altered the payout structure and began compensating investors not in Bitcoin but in their own cryptocurrency token, MCAP. The value of this token was significantly lower than Bitcoin, resulting in substantial financial losses for many investors.
Multiple cases filed across India
After the alleged fraud surfaced, complaints were registered in several parts of the country. Investors from Jammu and Kashmir, Maharashtra, Delhi and West Bengal, among other states, filed cases alleging large-scale financial deception.
Given the scale of the operation and its possible international links, the case was transferred for a central investigation. Authorities are now working to uncover the full extent of the network, identify other individuals involved and trace the funds collected from investors.
Investigators are also examining whether part of the money was transferred overseas and are attempting to map the flow of funds across digital wallets and international transactions.
Sources involved in the investigation say further developments are likely as the probe continues. Authorities believe that additional individuals connected to the alleged scam may come under scrutiny as more details emerge during the ongoing investigation.
