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The Rs 2000 Crore Bitcoin Fraud: Over 8,000 People Duped, Delhi ‘Entrepreneur’ Arrested

(Representative Image: Reuters)

(Representative Image: Reuters)

Bitcoin entrepreneur Amit Bhardwaj had started an online retail marketplace accepting Bitcoin in India in 2014.

Delhi-based Bitcoin entrepreneur Amit Bhardwaj was arrested by the Pune Police from the Delhi Airport on allegations of duping 8,000 people across the country for a total of Rs 2,000 crore. This arrest was followed after seven associates of Bhardwaj were arrested earlier. The Pune Police had traced Bhardwaj to Bangkok.

Bhardwaj had started an online retail marketplace accepting Bitcoin in India in 2014. “He owns a chain of bitcoin mining operations, notable among them are Gain bitcoin- which claims to have set up bitcoin mining operations in China, GB Miners, located in Hong Kong and the recently launched, MCAP,” according to a report by The Indian Express. The arrest of Bhardwaj was aided by a tip-off by local Bangkok agencies dealing with him.

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As per the report, Bhardwaj “had set up an elaborate Multi-Level marketing scam by luring investors to hand him bitcoins in the promise of higher returns.” He promised Bitcoin investors of a 10 percent return. “Bhardwaj also offered another option where he promised to facilitate bitcoin mining hardware to the investors, who may then mine their own bitcoins,” added The Indian Express report.

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“He has set up an office in Dubai and continues with his operations. We currently do not have a single FIR against Bhardwaj in our unit. A case has been registered in Prashant Vihar,” Deputy Commissioner of Police (Cyber and FICN) Bhisham Singh said in the report. Bhardwaj started his "bitcoin business" in Shalimar Bagh in Delhi. He later expanded his operation to China and got new investor through the referral multi-level marketing scheme.

In another news, the Reserve Bank today tightened the rules to discourage use of virtual currencies like Bitcoins and also announced a study to explore introduction of 'fiat' digital currencies which can be issued by it. An interdepartmental group has been constituted to study and provide guidance on the "desirability and feasibility" to introduce a "central bank digital currency" and will submit its report by June, the central bank said.

"Several central banks are debating the possibility of introducing a fiat digital currency. As opposed to private digital tokens, these are issued by a central bank. They constitute liability of the central bank, and they will be in circulation in addition to the paper currency that we have," Deputy Governor B P Kanungo told reporters during the customary post-policy address.

"We have decided to ring-fence the RBI regulated entities from the risks of dealing with virtual currencies. These operators are required to stop having a business relationship with the entities dealing with virtual currencies forthwith and unwind the existing relationships within three months," Kanungo said.

He further said that having such a currency will also reduce the cost of printing and circulating paper currency. Kanungo said the blockchain or the distributed ledger technology, which is the backbone of the digital currencies like Bitcoins, has a lot of relevance for the wider economy and we need to embrace those.

(With PTI inputs)

first published:April 05, 2018, 17:23 IST