India’s ED is investigating Raj Kundra in a $800m cryptocurrency Ponzi scheme, seizing assets and linking him to a failed Bitcoin mining project.
The Enforcement Directorate (ED) is probing Raj Kundra, a prominent businessman and husband of Bollywood actress Shilpa Shetty, concerning a money laundering case linked to a cryptocurrency Ponzi scheme dubbed ‘Gain Bitcoin.’ Notably, Kundra is not the main suspect in this investigation.
In the ongoing probe, the ED has confiscated assets worth roughly $12 million, including a Mumbai flat owned by Shilpa Shetty.
Launched in 2017 by Ajay Bhardwaj and Mahendra Bhardwaj, ‘Gain Bitcoin’ promised investors a return of 10% per month, payable in Bitcoin, and quickly amassed about $800 million.
The scheme initially operated by distributing returns to early investors using the funds from new participants. However, as recruiting new investors became challenging, the payouts stopped. The organizers then converted the remaining funds into Bitcoins and hid them in anonymous digital wallets.
Investigations have revealed that Kundra received 285 Bitcoins, now worth over $18 million, from Amit Bhardwaj, the promoter behind the scheme. The tokens were purportedly intended for a Bitcoin mining project in Ukraine that never materialized, and reports suggest Kundra still holds them.
Kundra and Shetty have denied any links to the scheme and remain confident they will be cleared of all charges once the investigation is completed.
The emergence of the ‘Gain Bitcoin’ scam coincides with increased scrutiny by Indian regulators over illicit activities involving cryptocurrencies.
Last month, the Enforcement Directorate escalated its efforts by filing a charge sheet against 299 entities under India’s stringent anti-money laundering laws. The legal action was a response to a series of frauds where investors were misled by promises related to crypto mining ventures.
Furthermore, the landscape of cryptocurrency scams in India is evolving, with a new pattern emerging among fraudsters. Recently, there has been a rise in scams where perpetrators pose as job recruiters. These malicious actors target unsuspecting job seekers, offering them roles that purportedly involve dealings in cryptocurrencies or related projects, only to defraud them.
