Supreme Court seeks response from Centre on plea for SIT probe into all FIRs in GainBitcoin scam

The Supreme Court on July 14 issued notice to the Central government on a plea seeking a probe by a special investigation team (SIT) into the GainBitcoin cryptocurrency scam which allegedly involves more than two lakh Bitcoins [Gautam Mahendrakumar Chordia Vs Union of India]

A Bench of Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V Mohana sought the response of the government to the plea seeking consolidation of all first informations reports (FIR) lodged across the country in connection with the scam.

The petition was filed by seven founding members of the Bitcoin Investors Protection Society (BIPS), led by Gautam Mahendrakumar Chordia. The organisation represents 273 identified victims of the alleged scam.

The petitioners claimed that Enforcement Directorate (ED) records indicate that more than one lakh investors across India were affected.

The GainBitcoin scheme allegedly induced investors to transfer Bitcoins on the promise of assured monthly returns through purported cloud-mining operations. According to the plea, the accused controlled investor dashboards, wallet infrastructure and exchange pathways while siphoning assets through proxy wallets, foreign-linked accounts and cryptocurrency exchanges.

The petition claimed that more than 35 First Information Reports (FIRs) were registered across India over the past decade. However, substantial assets remain unrecovered and several principal accused are allegedly absconding.

The petitioners have proposed a probe by a special investigation team (SIT) headed by a retired High Court judge. They have suggested that it should comprise senior officers of the Central Bureau of Investigation (CBI) and the ED, a nominee of the Ministry of Electronics and Information Technology and independent blockchain forensic experts.

The SIT should investigate all FIRs arising from the GainBitcoin, Variable Tech and GB Miners scam, irrespective of the place where the FIRs have been lodged. It should also trace, freeze and recover cryptocurrencies, investigate shell entities and proxy accounts and periodically report to the Supreme Court, the plea said.

The petition referred to the Supreme Court’s December 13, 2023 order transferring a cluster of GainBitcoin cases to the CBI. The Court had then permitted the CBI to consolidate FIRs and conduct further investigation.

However, the plea alleged that the CBI subsequently clubbed only ten FIRs while maintaining that it was not responsible for cases beyond those expressly covered by the Supreme Court’s order.

This created a “jurisdictional vacuum” with the CBI disclaiming responsibility for some FIRs while State Police authorities slowed or stopped their investigations on the assumption that the probe was transferred to the central agency, the petitioners contended.

The plea has sought the arrest and custodial interrogation of Ajay Bhardwaj, Vivek Bhardwaj and Mahender Bhardwaj, the persons alleged to be behind the scam.

It has also sought directions to secure approximately ₹7,404 crore allegedly linked to Ajay Bhardwaj’s trail and ₹1,969 crore allegedly linked to Vivek Bhardwaj’s trail.

The petitioners were represented by advocate K Krishna Mohan.