On Wednesday morning, Maharashtra minister of state for home Ranjeet Patil said that his government would ask the Enforcement Directorate, the central agency fighting economic crime, to probe allegations that Amit Bhardwaj and his company GainBitcoin had swindled investors of some Rs 2,000 crore through Bitcoin (BTC) Ponzi schemes – by far the largest such scam in India involving cryptocurrencies, if it is proven.

“The matter of duping of several investors with Ponzi schemes through the GainBitcoin website would be probed by the ED,” Patil told the state legislative assembly. This is the first time action at this level by a government is being taken against Bhardwaj and GainBitcoin. Earlier, a first information report had been filed in Nanded against Bhardwaj and the cryptocurrency investment scheme.

The moves by the Maharashtra government – it has also issued a ‘lookout notice’, made arrests, and sealed bank accounts – come at a time when Bhardwaj has left behind and closed the GainBitcoin operations and created a new company called GB21, which is another multi-level marketing (MLM) scheme being marketed aggressively in India and internationally. Investors in the previous GainBitcoin schemes have even been receiving threats for going public on social media with their complaints.

For those who came in late, who is Amit Bhardwaj?

Bhardwaj is arguably India’s biggest cryptocurrency miner and investor. Over the last two-three years, coinciding with the bull run in cryptocurrencies, he created an MLM scheme under the GainBitcoin umbrella that has in excess of 100,000 investors drawn to his promise of 10% monthly returns and had assets self-declared early last year at Rs 1,200 crore. His road to fame and riches are paved with advertisements in mainstream media, engaging Bollywood stars for publicity, and even an electronic book he is said to have authored.

As news of undelivered returns started surfacing early in 2017, fewer and fewer new investors came into the scheme making it difficult for Bhardwaj and team to service their promise of high returns. He soon forced payouts from Bitcoins to an in-house crypto token called MCAP with predictions that its price would grow 20-fold. That promise has remained just that – MCAP is at $0.39 today versus the $5.78 it was listed at – leaving most GainBitcoin investors left holding a lemon. When they started exploring legal options, Bhardwaj fled India for Dubai, where he operates from currently.

In December 2017, GainBitcoin was shut down and, according to the company, all investors would receive a final settlement in MCAP tokens. Some, to be sure, did. But, the scheme soon resurfaced in its new avatar of GB21 which solicited investments in MCAP unlike in the case of GainBitcoin where Bitcoin was the entry investment. The idea was clear: boost demand for MCAP and, in turn, its price.

Many of the GainBitcoin investors were credited MCAPs on the new GB21 platform – effectively, forcing them to make the switch. “Unlike what the notice on the site says, the accounts of most of the old investors including me have not been cleared. Instead, we have just been moved on to the GB21 platform. Now the company is forcing us to buy new plans from GB21 if we need to receive our payouts,” says one GainBitcoin investor from Mumbai. He had invested over Rs 3 lakh in GainBitcoin plans in April 2017. He asked for his name not to be taken in this story.

This is FactorDaily’s fifth story on Bhardwaj and his GainBitcoin empire. Our stories in the past starting August last year detailed Bhardwaj’s operations, investor woes, his pivot, and his plan to go international to boost the value of MCAP.

A mail with questions sent to Bhardwaj Wednesday afternoon remained unanswered at the time of publishing this story. Emails and calls to his spokesperson in the past four stories have also failed to elicit any response.

The new face of GB21

With GB21, Bhardwaj, who says he underwent a kidney transplant in August 2017, has taken a back seat. He has made the flashy Aashish Dabas the face of GB21. A dentist by training, Dabas had previously operated and run network marketing schemes out of the National Capital Region. He was also associated with GainBitcoin but was not very prominent when it came to its promotion.

As the new face of GB21, Dabas has been very actively promoting the new scheme though various social media channels of which the most prominent has been his YouTube channel where he has been uploading various promotional videos introducing different promoters and operatives of the GB21 network from across the world. These videos are not only in English and Hindi but also in Italian, Malay, Korean, Russian, and other languages.

Dabas has been travelling to market GB21 to international and Indian customers. He recently visited Mumbai and Pune, which he announced on Facebook, to meet investors and promoters who want to be on the higher echelons of the new MLM scheme. “Amit is now not travelling and is mostly seen attending events and functions in Dubai. Dabas is the one who is doing most of the marketing now to promote GB21,” says the Mumbai investor quoted earlier.

According to another early investor in GainBitcoin from Maharashtra, who has met Dabas, the marketing pitch for GB21 is simple: GainBitcoin failed because of greedy promoters. GB21 is a new scheme where he (Dabas) has full control and will be run fair and square. “He tries to disassociate himself from the company and claims that he just an investor like many others who wants to help bring the price of MCAP up. But everyone knows the reality that he is nothing but a front for Bhardwaj,” this investor adds. Again, he wants to stay anonymous for fears of his safety.

On Wednesday, when minister Patil was making his statement in the Maharashtra assembly, Dabas’s team was in Indonesia promoting GB21.

Dabas’s moves to front GB21 has led to not just aggressive marketing but also strong-arm tactics. An investor from Delhi recounts his story: “I had made a call to Bhardwaj on his Dubai number warning about legal action if my investment was not returned. In about 15 minutes, I got a call from another number. The caller warned me that they know my addresses and who lives there and I better be warned.”

There have been a few reports of abusive videos being uploaded by GainBitcoin operatives on YouTube and other channels against early investors trying to call out the GB21 team and operations. FactorDaily knows of at least one instance where an abusive video against an investor was pulled down by YouTube after the individual sent it a takedown notice.

Although the investigation at the highest level of government in India is likely to begin soon, bringing Bhardwaj and his team to book will take some doing. While the Union finance ministry, Reserve Bank of India and others have stated that cryptocurrency is not legal tender and, also, banks and other financial intermediaries have been clamping down on crypto trading, cryptocurrencies have not been banned in India yet. Direct selling and MLM schemes come under the purview of The Ministry of Consumer Affairs, Food and Public Distribution and are governed by the guidelines put out by the ministry, and it is not clear GainBitcoin or GB21 are registered with it.