The Enforcement Directorate (ED), India’s financial crime investigation agency, has sought the police’s help in a case of bitcoin theft worth Rs. 60 million ($790,000) by investigators assisting the police in a crypto fraud case involving over $260 million.
What is the matter?
According to media reports, ED officials visited the police commissioner’s office of Pune in Maharashtra province last Saturday and gathered some information about the crime.
The case pertains to two private cryptocurrency detectives, where they were allegedly transferring 1,137 bitcoins during a fraud investigation assisting the Pune Police. Cryptopotato previously reported the arrests of Pankaj Ghode, a cryptocurrency expert, and Ravindra Patil, an Indian Police Service (IPS) officer who had taken voluntary retirement and was working as a private digital asset investigation specialist.
The case in which Ghode and Patil were assisting the police relates to a cryptocurrency scam registered in 2018 that involved 87,000 bitcoins and at least 8,000 investors. As per ED estimates, the price of these bitcoins at the current market rate is Rs. 20,000 crore ($262.3 million).
Cryptopotato also reported on the case, where the main accused Amit Bhardwaj was accused by the ED of running a multilevel marketing (MLM) scheme called GainBitcoin. According to the plan, GainBitcoin was to provide a 10% monthly return on bitcoin investment.
Bitcoin theft during investigation
According to the First Information Report (FIR) registered by the Pune Police, the police engaged Ghode and Patil to recover bitcoins from Amit Bhardwaj’s e-wallet. For this, necessary information was taken from Bhardwaj and handed over to two private investigators.
But instead of playing fair, he transferred 1,137 bitcoins to his wallet and gave fake screenshots of Bharadwaj’s wallet to the police. Higher police officers were able to do wrong through KYC checks of the accused, and a case was registered against them, leading to their arrest.
The ED is probing the GainBitcoin case against Amit Bhardwaj and his associates, mostly his family members. Since there is no law in India that covers cryptocurrency fraud, crypto crime cases are dealt with under different laws depending on the nature of the crime. The GainBitcoin case was registered under the Prevention of Money Laundering Act (PMLA), and Amit Bhardwaj is out of jail on bail.
A Long Way to Crypto Fraud
Although there is no law in India to specifically address crypto-related crimes, there are regular reports of investors being duped by false promises of high returns on bitcoin investments.
In one such instance, the ED had earlier this month arrested an accused in the infamous Morris Coin case.
The alleged wrongdoer fled the country after he was granted bail in 2020, following his arrest under liberal sections of the Indian Penal Code. At that time, there were fewer complaints, and the scale of the fraud was fully exposed. According to estimates, the scam was worth at least $160 million and involved 900 investors.
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