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In the realm of cryptocurrency, promises of lucrative returns often attract investors seeking to capitalize on the digital boom. One such platform that stirred both curiosity and skepticism was Gain Bitcoin, which made bold claims of high returns to investors.
Gain Bitcoin was a controversial cloud mining platform that faced accusations of being a Ponzi scheme. It was a scheme scam where returns were paid to existing investors from funds contributed by new investors, rather than from profit earned. Helmed by Amit Bharadwaj, the platform touted itself as a revolutionary cloud mining solution. Yet, what unfolded beneath the surface was a narrative of deception and alleged fraudulent practices.
This blog embarks on exploring the Gain Bitcoin scam, examining the repercussions, and broader implications shedding light on the aftermath that left many investors disillusioned. In this scam, promises collided with reality, raising essential questions about due diligence in the volatile landscape of digital assets.
The audacious one trillion-dollar assertion raised eyebrows because it seemed overly optimistic and lacked transparent evidence to support such grandiose projections. Critics argued that these claims were unrealistic and potentially indicative of misleading practices.
Source: Smartprix
SCAMS AND PROMISES
Any scam that has happened to align with cryptocurrencies started with promises. The promise made by the mastermind Amit Bhardwaj was that the investors would get bitcoins with their money plus 10% Bitcoins every month. The scam team convinced investors by showing them fake websites, team members, names, and full-fledged offices. Instead, the investors got MCAPs, created by the Gain bitcoin scam team. There is no possibility of withdrawing these. The investors are forced to get MCAPs instead of Bitcoins. They are forced to accept them because they can’t be withdrawn or exchanged anywhere except at Amit Bhardwaj portals where exchange and withdrawal functions never work. Some of the investors withdrew the MCAP but instead of getting 0.8 Bitcoins, they received 0.2 Bitcoins.
The targeted group of investors were those who don’t have much clue about Bitcoin. They work on click baits of Gain bitcoin websites which show positive news, videos, and pictures about Bitcoin leading investors to believe in them. To obtain the bitcoin, they sell a false token named Amit Bhardwaj called MCAP. Investors buy that MCAP at an inflated price. They convince the investors that MCAPs are more valuable so they won’t exchange them for bitcoins.
Even Bhardwaj’s book Crypto Currency for Beginners endorsed by Bollywood actors Shilpa Shetty, Bipasha Basu, Prachi Desai, Neha Dhupia, and Madhavan led to more trust in his scheme. When the team refused to return some of the investor’s money for nearly 25 months, petitions were made on Change.org that asked the Delhi Police to investigate Gain Bitcoin and Bhardwaj for fraud. The petition, which got over 100 sign-ups, was appearing on Google searches and affected the chances of the Gain Bitcoin promotion.
Source: inc42
LEGAL ACTIONS
The top court asked Bhardwaj to disclose the username and password of his wallet after he was found responsible for the scam. The bank accounts of some of the investors were frozen by the HDFC ban. One of the major loopholes in the legal proceedings is India does not have strict boundaries regarding laws regarding virtual currency. Under India’s Securities Laws (Amendment) Act 2014, a Collective investment scheme pools funds from investors and involves a corpus amount of Rs 100 crore or more. Such schemes are mandatorily required to register with SEBI. But it is not very clear if Gain Bitcoin’s operations will come under this even though the value of the Bitcoins in the network is 100,000 investors which is far more than the Rs 100 crore threshold. Another issue that arises within this context is that virtual currencies do not have a particular jurisdiction to which they can be attributed. The value of virtual currency is still in speculation as they don’t have any legal status.
IMPACT OF GAINBITCOIN ON THE CRYPTOCURRENCY MARKET
One of the major impacts was that the sentiments regarding the crypto validity of the investors were affected. It also sheds light on the legality of crypto in India. There is no doubt that the scam has caused a ripple effect in the Indian crypto market. The term “ripple effect” is often used to describe the impact of a particular event in the crypto market which has widespread consequences on the prices and behavior of various cryptocurrencies. The Gain Bitcoin scam has led to speculations and doubts regarding the benefit of crypto investments.
Source: Forbes
RECENT DEVELOPMENTS AND PROTECTION AGAINST CRYPTO SCAMS
Reports have suggested that approximately 1 lakh victims have lost about 1 trillion rupees in this scam. More than 60000 email IDs may be addressed and user IDs in this regard have been traced by the police. So far, 80000 bitcoins have been collected s proceeds of crime during the investigation of the scam.
Cryptocurrency scams have become increasingly prevalent and may take multiple forms due to a lack of regulation in the industry. This scam was a type of Ponzi scheme. Scammers promised high returns on investments, most often relying on funds from new investors to pay returns to earlier participants. Eventually, the scheme collapsed, leaving most investors with losses.
To protect themselves from Ponzi scams in the cryptocurrency space, investors should be vigilant and adhere to certain practices. They should thoroughly conduct research, check for regulatory compliance, verify all the information, understand the investment model, practice diversification of investments, consult financial advisors, and be skeptical of unrealistically high returns. Last but not least, they should stay informed on common scam tactics and be aware of the potential risks involved.
CONCLUSION
As we bring the curtain down on the Gain Bitcoin scandal, we find ourselves at a crossroads of caution and education. The deceptive promises and subsequent unraveling of this once-prominent platform underscore the importance of due diligence and skepticism in the dynamic world of cryptocurrencies. As we reflect on the lessons learned from the Gain Bitcoin saga, let it serve as a reminder that the pursuit of financial gain in the digital asset realm requires a discerning eye and a commitment to understanding the intricacies of the projects in which we invest. As we move forward, let’s turn this unfortunate episode into an opportunity for collective growth. By learning from the mistakes of Gain Bitcoin and staying vigilant against similar scams, the investors must exercise caution, and thoroughly research any platform before committing funds. The Gain Bitcoin scam may be a chapter best left behind, but the lessons learned should guide us toward a more resilient and responsible future in the digital asset space.
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Authored by Irene and Bhoomi Arora
Under the guidance of Research and Outreach Director Liya Jomon
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