Article Source: INC42 Article
As the interest in bitcoins increases so does the controversies surrounding them increase especially in India. Amit Bhardwaj, self-proclaimed Cryptocurrency Guru, founder, and owner of mining pool GBMiners based in China and cloud mining operation Gainbitcoin has been said to be running a Bitcoin Ponzi scheme.Three months ago, a Gainbitcoin user, Zakhil Suresh has started a petition on change.org, appealing for the arrest of Bhardwaj on the basis of his fraudulent scheme.
Suresh is a finance student and he resides in Kerala, he invested in Bitcoins after he became interested in Amit’s startup and Gainbitcoins Bitcoins but wasn’t able to withdraw Bitcoins from the service. Suresh flew to Delhi to meet Bhardwaj.
As per the petition, Bhardwaj has also not responded to his claims that for over a year, he was still awaiting Bitcoin withdrawals.
He went on to state, ‘after one and a half years – my withdrawals are still pending even after I requested for my first withdrawal after 3 weeks’. He stated that he had contacted the support a number of times and he hasn’t gotten any response. He also stated that he had emailed Amit but he received no response. Two months later, he met with a couple of big names in the Indian BitCoin Community and explained his experience, who told Suresh more about him –Amit Bhardwaj is a fraud!
Amit Bhardwaj is the founder of AmazeMiners, which is an altcoin mining company, created in December 2016. He is also the founder of Gainbitcoin, GBMiners, and HightKart, which he claims to be the first India Bitcoin, based eCommerce sites as per his LinkedIn profile. In early 2016, these Bitcoin based ecommerce sites were closed.
2.8% of the network hash rate is controlled by GBMiners’ mining pool, as per data on Blockchain.info. Bhardwaj also announced the launch of his e-book today ‘Cryptocurrency for Beginners.’
Investigating Amit’s Alleged Ponzi Scheme
In an article written in January this year, doubts surrounding his alleged scheme were discussed on Coinjournal which is a cryptocurrency news site, it stated, “there are a lot of Bitcoin cloud mining schemes like the GainBitcoin have been exposed over the years to be Ponzi schemes.”
In an article written by Aria Thaker in March 2017, in The Caravan, similar doubts were raised when she interviewed him for his statement on Bitcoins. As written in the article, “He contradicted himself repeatedly and when he was asked about the relationship that exists between Gainbitcoin and GBMiners, he was evasive with his answers. With casual ease, he admitted, that he had lied to his investors about important information regarding Gain Bitcoin’s investments (“When they get high information, Gainbitcoin’s they feel good, right?” he told me he used inflated figures on GainBitCoin’s website in order to gain customers and investors.)
In one of the six India-based entities Bhardwaj directs, he has been declared a defaulter. An annual balance sheet has never been filed with the ministry of corporate affairs, he flouted the law. FactorDaily also highlighted these same facts in a report. Aria in her last month tweet disclosed that all the seven new team member profiles listed on GBMiners website are fake and that he is the sole contributor to almost all of the ‘crunch base’ profiles of these “new employees.”They have no social media footprint and otherwise blank.
Cryptocurrency-based companies, Bitcoin and cryptocurrency-based products are also associated with Amit and they include Bitcoin payment processor PayBitz and Bitcoin wallet service CoinBank. He is also an investor in Satoshi Studios in Southeast Asia, which is a hub for blockchain startups. We have contacted Amit’s corporate communication team and Satoshi Studios’ for a comment.
Zebpay, a bitcoin startup has made statements on their website and Facebook page several times about those cloud-mining companies like Gainbitcoin that guarantee fixed returns, are likely to be scams. Gainbitcoin made it clear that a 10 percent monthly return on customers’ investments into their cloud mining scheme.
The government is yet to decide on whether it should be made legal in India, despite getting a lot of interest from Indian users. A cautionary stance on cryptocurrency has been maintained by the RBI till now. They clearly stated that anyone using them does so at their own risk. By the end of July, the decision on legalizing cryptocurrency is expected to be announced.
Clarity and regulation from within the industry and from an outside authority are needed in blockchain and bitcoin. The important markers are Amit Bhardwaj and the alleged scam, they are the reason as to why the murky and undefined world of cryptocurrency needs to be regulated.
Update: July 4 2017, 7:55 pm
In an article published the co-founder of Satoshi Studios, Nikunj Jain, responded to Inc42 and informed us that Satoshi was involved as the technology vendor for GBMiners initially, but they ended their involvement with GBMiners, after they realized that they did not fully understand the fundamentals of the business. He also informed us that Satoshi cut off ties with him and that the money from Amit Bhardwaj has been returned last April.
Update: July 4 2017, 8:35 pm
The article previous version stated wrongly, that we contacted Amit for his statement concerning this story. We had reached out to Amit’s corporate communication team. The same has been updated on the story.