India Arrests Core Suspects in GainBitcoin, Cryptocurrency Ponzi Scheme Investigation Escalates

On March 12, the Central Bureau of Investigation (CBI) in India arrested Ayush Varshney, co-founder and Chief Technology Officer of Darwin Labs Private Limited, for his alleged involvement in the GainBitcoin cryptocurrency Ponzi scheme. The scam was operated by Variabletech Pte. Ltd., which promised high returns through investment in crypto mining packages, attracting a large number of investors’ funds but suspected of embezzlement.

The CBI stated that the technical development related to GainBitcoin was handled by Darwin Labs and its co-founders Ayush Varshney, Sahil Baghla, and Nikunj Jain, including the design and deployment of the MCAP cryptocurrency and its ERC-20 smart contract. The company also built underlying technological infrastructure such as the Bitcoin mining platform GBMiners.com, Bitcoin payment gateway, Coin Bank crypto wallet, and investor portal.

This arrest was initiated following an order from the Supreme Court of India in December 2023, which directed the consolidation of multiple complaints related to GainBitcoin for unified investigation by the CBI. During the investigation, Varshney had evaded arrest and was intercepted by immigration officials at Mumbai Airport on March 9 while attempting to leave India. He was formally arrested by the CBI the next day.

The GainBitcoin case is considered one of the largest cryptocurrency frauds in India to date, involving thousands of investors across multiple jurisdictions. Investigations revealed that the scam used complex technical platforms and smart contracts to attract investors, conceal fund embezzlement, and leverage the anonymity of cryptocurrency transactions to hinder tracing efforts.

Analysts note that the CBI’s actions demonstrate increased efforts by Indian regulators to crack down on crypto frauds and warn investors to exercise caution and identify potential risks when participating in high-yield crypto projects.