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How Gain Bitcoin Swindled Users Out of Over $12 Billion

An Indian-based company called Gain Bitcoin was accused of running one of the largest scams in the country. Back in March 2022, authorities shut down this illegal operation that was suspected to steal $3.8 billion or 80,000 from 100,000 victims. This number is larger, according to a recent report.

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Local authorities record over 40 reports filed by Gain Bitcoin or GainBitcoin victims. The scam stole money from people nationwide. New estimates claim that the illegal operation could have defrauded victims with as much as 600,000 BTC.

The total value of the scams is linked to the price of Bitcoin. The number one crypto by market caps has lost over 60% of its value since 2021 and currently trades at $20,500 with a 31% loss in the past week alone.

Bitcoin BTC BTCUSD
BTC trends to the downside on the daily chart. Source: BTCUSD Tradingview

One of GainBitcoin’s main suspects, Amit Bhardwaj was the alleged leader of the operation. However, this suspect died from a cardiac arrest.

His brother Ajay Bhardwaj is the primary suspect after Amit’s death. Local authorities have attempted to get Ajay to surrender the private keys and password to the crypto wallet which could be holding the stolen funds.

In a trial held in March 2022, Ajay refused to cooperate with authorities. His legal representation argued that the living Bhardwaj lacks the skills to operate a crypto wallet.

Local police enforcement agencies record over 60,000 IDs and email addresses, according to the news media, from potential victims. These people were attracted to the illegal operation due to its yield. Clients were promised a risk-free 10% monthly payment on their BTC deposits.

Those people that agreed to lend their BTC, the report says, were offered bigger monthly payments for taking on more risks. Ultimately, as often happens with these investments, the risk-free option is the most expensive.

Bitcoin-Based Ponzi Scheme Shocks India

The local report claims that Ajay Bhardwaj remains the prime suspect. Other suspects included Magender Bhardwaj and Vivek Bhardwaj, potentially related to the late lead suspect. The report quotes a spokesperson from India’s Enforcement Directorate (ED):

The investigation conducted so far has revealed that Amit Bhardwaj (who died in January this year) with the connivance of petitioner, Vivek Bhardwaj, Mahender Bhardwaj and others i.e, multi-level marketing agents and associates have collected 80,000 bitcoins as proceeds of crime.

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The ED is yet to track down all the crypto wallets related to the scam. In that sense, they have continued to conduct raids and perform other operations to advance the case which have led them to seize hardware, and other evidence linked to GainBitcoin.

Chinese Tech Giants Vow Support Additional Regulations on Digital Collectibles

Chinese tech giants join the state-backed efforts in regulating the digital collectibles by voicing support for the “self-discipline initiative” that ensures identity checks on users, adheres to the country’s ban on cryptocurrency and prevents the speculation of digital assets. Tech Giants Tiptoeing In Line With Authorities According to the statement by the China Cultural Industry::Listen

Chinese tech giants join the state-backed efforts in regulating the digital collectibles by voicing support for the “self-discipline initiative” that ensures identity checks on users, adheres to the country’s ban on cryptocurrency and prevents the speculation of digital assets.

Tech Giants Tiptoeing In Line With Authorities

According to the statement by the China Cultural Industry Association, a state-supervised organization, the initiative has garnered support from domestic tech giants such as Tencent Holdings, Alibaba’s Ant Group, JD.com, and Baidu, which all have deep involvement with digital collectibles in the country.

Known for its anti-crypto stance, China refers to Non-Fungible-Tokens (NFTs) as digital collectibles, which only support the country’s legal tender, Yuan, as the settlement currency. The initiative reiterates such a stance and calls the giants to follow a set of guidelines to assist regulatory efforts.

Under the 14 articles introduced by the initiative, digital collectable platforms are expected to hold relevant regulatory certifications, bolster intellectual property protection, advocate real-name authentications, and avoid establishing secondary markets meant for speculative purposes.

Alibaba-owned South China Morning Post cited a source acquired from the blockchain industry in China, stating that the initiative does not “represent the government’s stance.” Rather, it is an industry-driven attempt to respond to the previous guidelines issued by government-managed industry associations, aiming to prohibit “the financialization of digital collectibles” through securities, insurance, loans, and precious metals.

The Rise of Digital Collectibles in China

Despite the government-issued warnings on the risk of digital collectibles, the number of domestic platforms that offer services in such trading has grown five times from February to June.

Meanwhile, tech firms stepping into this sensitive field in China remain low-key, as they tried not to cross the red line as dictated by the authorities. As expected, they all avoided using the term “NFTs” to describe digital collectibles, as regulatory authorities tend to link NFTs with speculations on cryptocurrencies.

Tencent and Ant Group have private and permissioned blockchains separated from the global NFT markets, mostly built upon layer-one blockchains like Ethereum, Solana, Flow, etc. In compliance with relevant regulatory scrutiny, platforms only let owners treat their assets as digital gifts absent from financial speculations.

How Gain Bitcoin Swindled Users Out of Over $12 Billion

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