ED seeks UAE help to attach ₹69-crore assets in bitcoin Ponzi case

The ED seeks UAE's help to attach ₹68.66 crore in assets linked to a bitcoin Ponzi scheme worth ₹6,606 crore, involving 35 FIRs against Variable Tech Pte Ltd.

MUMBAI: The Enforcement Directorate (ED) has sought legal assistance from authorities in the United Arab Emirates (UAE) to attach assets worth AED 28.4 million ( ₹68.66 crore) that were allegedly bought using money diverted from a bitcoin-based Ponzi scheme worth ₹6,606 crore perpetuated through a Singapore-based firm, Variable Tech Pte Ltd.

ED seeks UAE help to attach ₹69-crore assets in bitcoin Ponzi case

The assets, located in the UAE, are commercial properties in prominent business centres that the ED had provisionally attached between September 2018 and December 2022, officials said. On November 29, a special court for cases under the Prevention of Money Laundering Act issued a judicial request to UAE authorities, seeking legal assistance as requested by the ED to attach the properties.

The ED began its investigation in 2018 based on 35 FIRs registered across India against Variable Tech Pte Ltd, its then managing director Amit Bhardwaj (who is now deceased), and several multi-level marketing agents, among others. The accused and their accomplices had allegedly collected funds worth ₹6,600 crore, in the form of 80,000 bitcoins (at 2017 rates), from gullible investors on the false promise of 10% monthly returns.

The accused claimed the money would be used for bitcoin mining and that investors would receive substantial returns in crypto assets. However, the funds were allegedly siphoned off. Bitcoin is a convertible virtual currency that is not a legal tender in India. Bitcoin mining is the process of verifying and adding new transactions to the Bitcoin blockchain, which also releases new bitcoins into circulation.

The ED’s investigation revealed that the scheme came to a standstill in November 2017, when the exchange rate was ₹8.25 lakh per bitcoin, and the proceeds were transferred to several crypto wallets through a web of interconnected transactions to hide the original source and make it difficult to track.

The investigation also revealed that Bhardwaj and his accomplices used the fraudulently collected bitcoins to purchase several immovable properties in India and abroad, make investments in various companies, and for their personal gain. Bhardwaj allegedly floated many companies in various countries, including AB Holdings and Investments Ltd in the UAE, through which several immovable properties were acquired in the Gulf country, officials said.

The ED is also investigating at least eight other overseas firms, including some based in Hong Kong and Estonia, which were allegedly used to divert the proceeds of crime in the case. The agency has so far filed a main charge sheet in June 2019 and a supplementary one in February 2024 against 16 accused in the case.