CBI Arrests GainBitcoin CTO in $790 Million Cryptocurrency Ponzi Probe

India’s Central Bureau of Investigation (CBI) has taken custody of Ayush Varshney, co-founder and Chief Technology Officer of Darwin Labs Private Limited, in connection with the GainBitcoin cryptocurrency fraud, one of the country’s largest Ponzi schemes. The arrest follows the Supreme Court’s consolidation of multiple FIRs into a single investigation targeting the multi-layered scam that defrauded thousands of investors.

Varshney was intercepted by immigration authorities at Mumbai’s Chhatrapati Shivaji Maharaj International Airport on March 9 while attempting to leave India and formally arrested the next day. A Look Out Circular had been issued to prevent his departure. CBI officials say Varshney designed the scheme’s technical infrastructure, including the MCAP token, ERC-20 smart contracts, investor wallets, payment gateways, the GainBitcoin website, and the Bitcoin mining platform GBMiners.com.

Launched in 2015 by Amit Bhardwaj and Ajay Bhardwaj through Variabletech Pte. Ltd., a Singapore-registered entity, GainBitcoin promised fixed monthly returns of roughly 10% through “cloud mining” contracts. Multi-level marketing mechanisms encouraged participants to recruit new investors, creating a pyramid structure where deposits from later investors funded earlier payouts. Authorities estimate losses at $790 million, impacting over 100,000 investors across major Indian states.

Darwin Labs’ infrastructure misrepresented mining activity, with no real allocation of mining power to investor accounts. Coordinated raids at over 60 locations in February 2025 led to seizure of cryptocurrencies worth around ₹23.94 crore ($2.6 million). The Enforcement Directorate is investigating money laundering and tracing fund flows, while CBI focuses on core fraud and asset recovery.

The case highlights the ongoing risks of cryptocurrency Ponzi schemes amid limited regulatory oversight. Authorities have repeatedly warned that some crypto investment products resemble Ponzi structures. India’s financial regulators continue tightening oversight, requiring banks to fully collateralize credit to brokers and proprietary traders, aiming to reduce systemic vulnerabilities and protect investors.