9 overseas firms under ED’s scanner in ₹6k cr bitcoin ponzi scam

The Enforcement Directorate is investigating nine overseas firms, including those in Hong Kong and Estonia, that were allegedly used to divert funds from a bitcoin-based ponzi scheme operated by Variable Tech. The scheme collected 80,000 bitcoins and diverted funds worth INR 6,606 crore ($915 million) through the nine firms to purchase properties abroad. The investigation has resulted in the provisional attachment of properties worth INR 69 crore.

MUMBAI: The Enforcement Directorate (ED) has started probing at least nine overseas firms including those based in Hong Kong and Estonia that were allegedly used to divert the proceeds of crime from a bitcoin-based ponzi scheme operated by the Singapore-based Variable Tech Pte Ltd.

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Agency officials said Variable Tech collected 80,000 bitcoins from gullible investors across the country by promising high returns, and funds worth ₹6,606 crore were diverted through the nine firms for purchasing properties abroad.

The firms under ED’s scanner include Amaze Mining and Blockchain Research Ltd, Hongkong; Green Ocean Overseas, Hongkong; Blue Wave Trading, Hongkong; AB Marketing Consultancy FZE, Dubai; Crypto Capital, Estonia; ABC Mega Alliance DMCC/ABC Megacorp, Dubai; AB Holdings, Dubai; AB Facilities, Dubai; and Purple Rain Trading Company, Dubai.

The ED initiated an investigation into the ponzi scheme in 2018, on the basis multiple cases registered by Maharashtra and Delhi police against Variable Tech, late Amit Bhardwaj, Ajay Bhardwaj, Vivek Bhardwaj, Simpy Bhardwaj, Mahender Bhardwaj and other multi-level marketing agents. It found that Variable Tech had been formed to allegedly lure gullible investors by promising them high returns in the form of crypto currency developed by the company. No returns were ever paid back to investors, according to the ED, which submitted the first case chargesheet against the accused in 2019.

On Sunday, the ED arrested Simpy Bhardwaj, one of the accused, from Delhi. The agency also seized three cars including a Mercedes GLS350D and an Audi Q3, some documents and jewellery worth ₹18.91 lakh from the residence of Simpy and her husband Ajay Bhardwaj, the main accused in the case who is absconding.

“The accused persons including Simpy were actively involved in generating, concealing and layering of the proceeds of crime,” said an ED official.

Bhardwaj was brought to Mumbai and produced before a special Prevention of Money Laundering Act court on Monday. Her lawyers contended that since the agency’s previous case chargesheet contained a number of flow charts showing the money trail, her arrest was not required. She was also not a director in any of the firms under the scanner and some cases were filed after the filing of the case chargesheet, they said. The court, however, remanded Bhardwaj in the ED’s custody till December 26.

The ED’s investigation till now has resulted in the provisional attachment of properties worth ₹69 crore.

BOX: On the money trail

80,000 bitcoins collected by Variable Tech from gullible investors

₹6,606 crore diverted by Variable Tech through overseas firms

₹69 crore value of properties provisionally attached by ED in the case

Firms under ED’s scanner:

Amaze Mining and Blockchaing Research Ltd, Hongkong

Green Ocean Overseas, Hongkong

Blue Wave Trading, Hongkong

AB Marketing Consultancy FZE, Dubai

Crypto Capital, Estonia

ABC Mega Alliance DMCC/ABC Megacorp, Dubai

AB Holdings, Dubai

AB Facilities, Dubai

Purple Rain Trading Company, Dubai