Ayush Varshney, who co-founded Darwin Labs Pvt. Ltd. alongside Sahil Baghla and Nikunj Jain, was intercepted a day earlier on March 9 under a Look Out Circular issued by the Central Bureau of Investigation (CBI). Authorities formally placed him under arrest the following morning. The case involves an alleged Ponzi scheme that bilked investors out of funds the CBI officially estimates at roughly 6,606 crore rupees (approximately 790 million dollars). The CBI has documented approximately 8,000 investors as victims, though victims' groups estimate the total number of people affected at as many as 1 lakh (100,000). The financial scale is similarly contested. The approximately 29,000 Bitcoins allegedly mined through the scheme carry a present-day value of roughly 20,000 crore rupees (about 2.4 billion dollars); investigative reporting by Inc42 has placed total losses, including unreported victims, at around 2.7 billion dollars; and some upper-range projections exceed 1 lakh crore rupees (over 12 billion dollars).

How the Scheme Worked

GainBitcoin launched in 2015 and operated through a Singapore-incorporated entity called Variabletech Pte. Ltd. The scheme was launched by Amit Bhardwaj and his brother Ajay Bhardwaj, who marketed it as a Bitcoin cloud mining service. Investigators consider Ajay Bhardwaj to possibly have been the operational kingpin of the venture, and he remains under scrutiny.

Investors were promised a 10 percent monthly return paid in Bitcoin over 18 months, an annualised yield of roughly 120 percent. The structure relied on multi-level marketing, meaning earlier participants earned commissions by recruiting new ones. At its peak the scheme claimed operations across 90 countries.

When new deposits slowed around 2017, operators stopped paying out Bitcoin and substituted a proprietary token called MCAP, an ERC-20 asset developed by Darwin Labs and deployed on the Ethereum blockchain. An accompanying initial coin offering (ICO) raised between 14.5 million and 19 million dollars at a stated price of four dollars per token. That token carries no meaningful market value today. Investors who had deposited Bitcoin effectively received a worthless in-house asset in return.

Darwin Labs' Role and the Arrest's Significance

The CBI stated that Darwin Labs designed, developed, and deployed the full technology stack behind the scheme. That included the GBMiners.com mining pool, a Bitcoin payment gateway, a wallet service called Coin Bank, the investor-facing GainBitcoin portal, and the MCAP smart contract itself. The firm reportedly received a 20 percent cut of the venture in exchange for building that infrastructure. "Darwin Labs played a central role in building the technological infrastructure used by the alleged scheme," the CBI said, as reported by CoinTelegraph.

Varshney faces charges under Indian Penal Code sections 120B (criminal conspiracy), 406 (criminal breach of trust), and 420 (cheating), as well as Section 66 of the Information Technology Act 2000.

This is the first arrest since the Supreme Court of India ordered all scattered state-level complaints consolidated under the CBI on December 13, 2023. Cases had previously been fragmented across eight different Indian states for years, stalling progress. Prior to this arrest, the CBI conducted raids at more than 60 locations in February 2025, seizing approximately 23.94 crore rupees (about 2.86 million dollars) in crypto assets along with hardware wallets, laptops, and mobile devices. In April 2024, the Enforcement Directorate separately attached assets worth approximately 97.8 crore rupees (roughly 11.7 million dollars), including a Mumbai flat, a Pune bungalow, and 10.63 crore rupees in Dubai properties.

Amit Bhardwaj, identified by the CBI as the scheme's alleged mastermind, was arrested in Bangkok in March 2018, released on bail for health reasons in 2019, and died of cardiac arrest on January 15, 2022, at age 38, before facing any conviction. His brother Ajay Bhardwaj, whom investigators consider to possibly have been the scheme's operational kingpin, remains under scrutiny.

Bollywood Connection and Ongoing Legal Threads

A parallel track has drawn wider public attention in India. In September 2025, the Enforcement Directorate filed a chargesheet against Raj Kundra, the businessman married to Bollywood actress Shilpa Shetty. According to the agency's court filings, Kundra received 285 Bitcoin from Amit Bhardwaj, valued at roughly 150 crore rupees (around 18 million dollars) at current prices, in connection with establishing a Bitcoin mining operation in Ukraine. Kundra denied the allegations and received bail on February 20, 2026. Those proceedings continue separately under the Prevention of Money Laundering Act.

What This Means Across South Asia and Beyond

The Varshney arrest carries implications beyond India. For developers operating in India, it signals that building technical infrastructure for a fraudulent scheme can result in criminal prosecution, not just the promoters who ran it. That is a meaningful shift in how Indian investigators are framing liability. Indian developers working on contract now face a clearer precedent that due diligence on client projects matters legally.

The scheme's mechanics, specifically unrealistic fixed returns, an MLM recruitment layer, and a proprietary token substituted for promised assets during collapse, remain a live template used in active fraud schemes targeting retail investors across South Asia, including in Pakistan, Bangladesh, Sri Lanka, and tier-2 Indian cities.

The arrest also comes against a complicated domestic enforcement backdrop. India's Union Budget 2026 maintained a 30 percent flat tax and a 1 percent TDS on crypto transactions, a regime associated with approximately 73 percent of Indian crypto trading volume migrating to offshore platforms. That dynamic limits the practical reach of domestic enforcement even as the CBI pursues a case of this scale.

Victim recovery, however, remains deeply uncertain. The seized and attached assets documented to date represent a small fraction of documented losses, and investigators have not publicly disclosed access to the cold wallets believed to hold the bulk of misappropriated Bitcoin. Two other Darwin Labs co-founders, Baghla and Jain, remain co-accused.