Key Highlights
- CBI arrests GainBitcoin CTO for ₹6,000 crore crypto fraud, exposing large Ponzi scheme.
- Darwin Labs built an entire crypto scam platform, misleading investors with fake returns.
- Rising cyber fraud cases show India’s crypto market is risky; authorities are cracking down.
India’s ongoing crackdown on crypto-related financial fraud has led to a key arrest in the infamous GainBitcoin case. The Central Bureau of Investigation (CBI) on Wednesday arrested Ayush Varshney, Co-Founder and Chief Technology Officer (CTO) of Darwin Labs Private Limited, in connection with the ₹6,000 crore (~$720 million) GainBitcoin cryptocurrency scam.
Varshney, who had been on the run, was stopped at Mumbai airport while trying to leave India. Airport authorities detained him and later handed him over to the CBI, which formally arrested him on March 10. Investigators say the case involves a large Ponzi scheme that promised investors unusually high returns through cryptocurrency investments.
The GainBitcoin fraud allegedly involved Variabletech Pte. Ltd., which designed and promoted the scheme to lure investors. Funds collected were reportedly misappropriated. Following a Supreme Court directive, the CBI registered cases under Sections 120B, 406, and 420 of the Indian Penal Code (IPC), along with Section 66 of the IT Act, 2000.
The court said that all similar complaints should be handled together. As a result, the investigation focused on Darwin Labs and its co-founders, Sahil Baghla and Nikunj Jain, for creating the MCAP crypto token and its smart contract.
Technological backbone of the scam
The entire infrastructure for this scheme was created by Darwin Labs Private Limited. This included the Bitcoin mining platform GBMiners.com, the Bitcoin payment gateway, the wallet service of Coin Bank, and the investor portal of GainBitcoin.
In addition to this, the company carried out complex digital operations to give the impression of a legitimate business. This case study illustrates how cryptocurrency technology can be misused for financial fraud, considering the lack of regulatory control.
The broader GainBitcoin investigation has also drawn in other high-profile figures in recent years. In 2025, India’s Enforcement Directorate (ED) charged businessman Raj Kundra in connection with a ₹150 crore (~$18 million) money laundering case linked to the scheme. Authorities alleged that proceeds from the scam were routed through various entities and crypto assets as part of the laundering process.
In another related development in 2026, a court granted interim relief to Kundra in a case involving the seizure of around 285 Bitcoins and digital evidence, including a damaged iPhone that investigators claimed could contain key information related to transactions tied to the GainBitcoin network.
Broader cybercrime trends in India
Apart from GainBitcoin, India has been facing other cybercrimes. In late February, the CBI arrested three individuals for the ₹1.86 crore “Digital Arrest” cyber fraud on a senior citizen in Kerala. The authorities found that the fraudsters used fake SIM cards, mule accounts, and crypto assets for extorting money from the victims.
In another incident, the police in Hyderabad reported that a businessman lost ₹2.65 crore after being duped by Polyus Finance PFP Gold through a fake Facebook conversation.
These cases show how risky India’s booming crypto market has become. Investors need to stay alert, while authorities are stepping up efforts to catch cyber fraudsters.
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