Here is the son of an ex government employee from Shalimar Bagh of Delhi, who currently owns a house in Dubai’s Burj Khalifa, one of the tallest building in the world. However, this is not one of the magnificent stories of a middle-class man becoming very successful. It’s quite something else on the whole.
Amit Bhardwaj, a former software developer with Infosys and stock broker, is suspected to have fled to Dubai after conning an estimated amount of Rs 2,000 crore through a Ponzi scheme based on bitcoins, the mostly unregulated digital ‘cryptocurrency’ that has been became popular with its sharp spike in value.
Bhardwaj, whose businesses are reported to have a turnover of millions, now faces fraud cases in a number of states, with investigative agencies struggling to get him back to the country.
The ‘scam’
As of April 1’s evening, one bitcoin was valued at just over Rs 4.26 lakh. But in 2017, the value exceeded Rs 10 lakh.
Under Bhardwaj’s scheme, an investor purchasing one bitcoin was promised 10% of its value every month for the subsequent 18 months, implying that by the end of the period, an investor was supposed to get back almost double the value invested.
The entire transactions took place in bitcoins through Bitex, a bank vault for the currency. Thus, there was no association of the Indian currency and therefore no tax liabilities.
Also, added incentives were announced for investors who got more people to sign up. Bhisham Singh, Deputy Commissioner of Police, Delhi Police crime branch said, "Bhardwaj floated a multi-level marketing (MLM) scheme, where he lured investors with referral incentives to rope in more people to put their money."
In an MLM scheme, every person must draw a definite number of people to invest, which earns them a commission. "The incentive would eventually add up to an investor’s returns in their account."
"To lure investors, his companies hosted seminars in five-star hotels and even invited celebrities. At the seminars, the concept of bitcoins was explained, as was how an investor could make money by investing in GainBitcoin," Singh included.
Bhardwaj’s scheme offered returns in three forms: A monthly return of 10% on their investment for 18 months; a one-time payment for pulling more people to invest; and a mining income.
When investors woke up to the ‘fraud’
Seeing that bitcoin prices saw huge spike Bhardwaj allegedly went rogue. "As bitcoins became popular and their value spiked, he had to return 10 times what he was given, so he stopped giving the payback and duped several investors," a police officer said.
Whenever a bitcoin transaction is made, it is reflected to customers via an e-wallet app, which lets one to monitor their bitcoin balance, its current market value, and other transaction information. One can also sell or purchase bitcoins through the wallet.
Within some period of time, the investors were realized that something was wrong as the promised returns never reflected in their e-wallets.
"Though Bhardwaj’s company claimed to have transferred the bitcoins, it was never reflected in the investors’ wallets," a police officer said. "It was later discovered that the transfers never happened, and that hundreds of people had been duped of crores of rupees."
"Through the Ponzi scheme, he earned crores and bought several properties in India and abroad," another police officer said.
Once they realised they had been cheated, Bhardwaj’s investors begun filing complaints with the police and on change.org looking for his arrest. Bhardwaj has supposedly hoodwinked investors from Delhi, Pune, Nanded, Mumbai and Kolhapur.
A year ago, Maharashtra Police roped in the Enforcement Directorate to investigate the alleged Rs 2,000 crore fraud and a lookout notice has been issued against Bhardwaj, who is yet to be confirmed a proclaimed offender in the majority of cases.
The man behind the ‘scam’
Bhardwaj is a computer science graduate from Nanded’s Mahatma Gandhi Mission College of Engineering. He is apparently in his late 30s.
As indicated by sources, Bhardwaj’s father was an employee in the finance ministry, which is how he initially developed an interest in economics. He worked with Infosys for some time before turning into a stock broker.
In the long run, he turned to bitcoin mining, becoming one of the few early players in the cryptocurrency market by providing genuine bitcoins. Currently, Bhardwaj owns a chain of cryptocurrency operations that deal with the mining and processing of bitcoins, such as GainBitcoin, GBMiners and MCAP.
As bitcoins ascended in popularity, Bhardwaj was requested to make a presence on several talk shows on news channels and seminars as an expert to explain what cryptocurrencies were the manner by which they worked and how they were mined.
What is GainBitcoin, GBMiners?
While most of the businessmen deal in the sale and purchase of bitcoin, Bhardwaj’s company claimed to mine the crytocurrency, a process through which new bitcoins are brought into circulation. Cloud mining is one of the techniques of bitcoin mining, and requires massive infrastructure and power.
As per GainBitcoin claims, its bitcoin-mining farms are in China and investors from across the world can utilize the hardware without having to preserve it. GBMiners (GainBitcoin Miners), another company located in Hong Kong, claims to be the initial bitcoin-mining pool from India. A mining pool is a group of miners pooling their resources and sharing the rewards.
Source: TechGIG
Source: TechGIG
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