India arrests key suspect in GainBitcoin crypto Ponzi scheme

India’s premier investigative agency, the Central Bureau of Investigation, has arrested Ayush Varshney, co-founder and chief technology officer of Darwin Labs Private Limited, in connection with the alleged GainBitcoin crypto fraud.

Summary

• The Central Bureau of Investigation arrested Ayush Varshney, co-founder of Darwin Labs, in the GainBitcoin fraud probe.
• Investigators say Darwin Labs helped build technical infrastructure linked to the alleged scheme, including the MCAP token and GBMiners platform.
• Varshney was intercepted at Mumbai airport while allegedly attempting to leave India after a Look Out Circular was issued.

CBI arrests GainBitcoin scam suspect at Mumbai airport

The case relates to the GainBitcoin scheme allegedly operated by Variabletech Pte. Ltd., which investigators say functioned as a Ponzi-style investment program that promised unusually high returns to participants who invested in cryptocurrency mining packages.

According to the CBI, funds collected from investors were later misappropriated.

Authorities are investigating the case under several provisions of the Indian Penal Code, including criminal conspiracy, criminal breach of trust and cheating, along with provisions under the Information Technology Act, 2000.

The probe stems from a December 2023 directive by the Supreme Court of India ordering that multiple complaints linked to the GainBitcoin scheme be consolidated and investigated by the CBI as the central agency.

Investigators say Darwin Labs and its co-founders — including Varshney, Sahil Baghla and Nikunj Jain — played a role in the technical development of components associated with the scheme.

These included the design and deployment of a crypto token known as MCAP and its associated ERC-20 smart contract.

Indian authorities allege the firm also built the underlying technological infrastructure used in the operation, including the Bitcoin mining platform GBMiners.com, a bitcoin payment gateway, a crypto wallet known as Coin Bank and the GainBitcoin investor portal.

Varshney had been absconding during the investigation, prompting authorities to issue a Look Out Circular against him. Immigration officials intercepted him at Mumbai airport on March 9 while he was allegedly attempting to leave the country.

He was subsequently taken into custody by the CBI and formally arrested on March 10.

The GainBitcoin case is considered one of India’s largest crypto-related fraud investigations, involving thousands of investors across multiple jurisdictions.