On the grounds of a lengthy investigation into GainBitcoin, a cryptocurrency fraud case, the Central Bureau of Investigation (CBI) of India has arrested Ayush Varshney, co-founder and chief technology officer of Darwin Labs Private Limited.
During the investigation, this arrest has become a major breakthrough in one of the biggest cryptocurrency scams in India.
The Scheme in Question
GainBitcoin, a company that started in 2015, assured its customers that they would get 10% monthly returns in Bitcoin for a period of 18 months.
The company, which was advertised through Variabletech Pte. Ltd., is believed to have operated a multi-level marketing scheme, whereby the rewards were dependent on the recruitment of new members.
When the flow of fresh deposits diminished, the platform started paying users in their own MCAP token instead of Bitcoin, which was worth much less.
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Darwin Labs’ Participation
According to the allegations of the CBI, Darwin Labs was mainly responsible for creating the technological infrastructure that supported the whole operation, such as the GainBitcoin investor platform, mining pool, Bitcoin payment gateway, and Coin Bank Bitcoin wallet.
Varshney was not only a co, founder of the MCAP token and its related ERC-20 smart contract with Sahil Baghla and Nikunj Jain but also took part in the design and layout.
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Investigation
The GainBitcoin matter has drawn the participation of around 8,000 investors and is said to have caused losses worth 6,606 crore ($790 million).
In over 60 locations, the CBI has made searches, and the agency is still finding out the role of other persons and organisations that were in the scheme. The Supreme Court has given the investigation to the CBI because the scheme is very large and has connections to other countries.
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