Promotional events held abroad to lure investors under ED scanner

ED probe reveals ₹6.6k cr Bitcoin Ponzi scam by Variable Tech Pte Ltd. Promoters spent ₹1 crore on events in Macau, Dubai, collected 80k bitcoins from investors.

₹6.6k cr Bitcoin-based Ponzi scam

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MUMBAI: The Enforcement Directorate’s investigation into the ₹6,606 crore bitcoin-based Ponzi scheme operated by Singapore-based Variable Tech Pte Ltd has revealed that the promoters spent up to ₹1 crore to organise promotional events in Macau and Dubai, while their stated annual income was only ₹5 lakh- ₹6 lakh.

The promotional events were allegedly held to lure people into investing in the scheme, in which no investor eventually got any returns, an ED official said. The alleged scam took place between October 2016 and August 2017, where the promoters paid those who organised the promotional events in bitcoins or an equivalent sum as per the rate in 2017, the official added.

The agency is looking to gather contracts that may have been signed for organising such promotional events abroad. The investigation found that Variable Tech had allegedly collected 80,000 bitcoins from gullible investors across the country by promising high returns, and funds worth ₹6,606 crore were diverted through nine foreign firms for purchasing properties abroad.

The ED initiated its investigation in April 2018 based on multiple cases registered by the Maharashtra and Delhi police against Variable Tech and its promoters, who allegedly cheated investors by making false promises of a 10% monthly return in the form of bitcoins.

The bitcoins collected from investors were meant to be used for bitcoin mining, with investors expecting lucrative returns in the form of crypto assets. However, the promoters allegedly siphoned off the bitcoins and concealed them in obscure online wallets. They did not pay the promised returns to the investors, according to ED sources.

Bitcoin is a decentralised cryptocurrency that’s not a legal tender in India. Mining is the process used by Bitcoin and other cryptocurrencies to produce new coins and examine new transactions. The accused persons had allegedly devised a software to mine Bitcoins and made “Bitcoin Cloud Mining Contracts” with several gullible investors.

The ED had previously attached properties worth ₹69 crore in the case. It submitted a chargesheet in June 2019 and on February 14 this year, of which a Mumbai special court has taken cognisance.