CBI Arrests Darwin Labs Co-Founder Over $2B Bitcoin Scam

India’s main investigative agency has made a major arrest in one of the biggest crypto fraud cases. The Central Bureau of Investigation has arrested Ayush Varshney. The co-founder of Darwin Labs for his alleged role in the massive GainBitcoin scam

Authorities stopped Varshney at Chhatrapati Shivaji Maharaj International Airport in Mumbai. He was allegedly trying to flee India. Officials had earlier issued a Lookout Circular. That alerts immigration officers to stop suspects from traveling abroad.

The case involves a crypto investment scheme. It is worth about ₹20,000 crore ($2.17 billion). The scam affected thousands of investors across India. It has been under investigation for years. In this case, the arrest is the CBI’s first major detention. Officials say the action may result in more arrests. While the investigation is ongoing.

How the Arrest Happened?

Immigration officers stopped Varshney at Mumbai airport. While he tried to board a flight to Colombo, Sri Lanka. Because of the Look Out Circular issued earlier. The authorities detained him immediately. After the detention, officials handed him over to the CBI for questioning. The agency formally arrested him the next day.

Investigators say Varshney had been absconding for some time. Authorities suspected he might attempt to leave the country. While the investigation expanded. The CBI registered the case under several sections of the Indian Penal Code. Including charges related to cheating, criminal conspiracy and breach of trust. Investigators also applied provisions under the Information Technology Act.

Darwin Labs’ Alleged Role in the Scheme

According to investigators, Darwin Labs helped build the technical systems used in the GainBitcoin scheme. The company allegedly developed the MCAP token. Along with several ERC-20 smart contracts. That supported the project’s operations. Authorities say the company provided the digital infrastructure. Which allowed the scheme to run and manage transactions.

Varshney is as a co-founder and CEO at Darwin Labs. Investigators believe his technical expertise helped design and maintain key parts of the system. This case raises an important question in the crypto industry. Whether developers and tech providers can be held responsible when their platforms are used in fraud.

The GainBitcoin Scam Explained

The GainBitcoin scheme started around 2015. It was created by Amit Bhardwaj, who later died in custody. The project promised investors monthly returns of around 10% if they deposited Bitcoin into the platform. It claimed the profits came from Bitcoin mining operations. But investigators say the project worked more like a Ponzi scheme. New investor funds were allegedly used to pay returns to earlier participants.

Authorities believe the scheme attracted over 10,000 investors across India. Reports suggest it involved roughly 29K BTCs at its peak. Several law enforcement agencies have looked into the case over the years. Including financial regulators and state police.

Investigation Still Ongoing

The CBI says the investigation is far from over. Authorities have already done raids at dozens of locations. That is linked to the case in recent years. The roles of other people and companies involved in the plan are also being investigated by officials. After years of waiting for action, the arrest gives many victims some hope.

While the case highlights the risks. That can happen in rapidly emerging crypto markets where legislation and governance are still forming. Authorities say they remain focused on identifying suspects and tracing funds as the investigation continues. They will recover stolen assets wherever possible.