Indian Authorities Arrest Darwin Labs’ Co-founder After $2.1B Bitcoin Fraud

India’s Central Bureau of Investigation (CBI) has arrested Ayush Varshney, co-founder and Chief Technology Officer of Darwin Labs Private Limited, in connection with a $2.1 billion crypto fraud case. This marks the first significant arrest in the long-running investigation into the GainBitcoin cryptocurrency scam.

According to a press release, authorities apprehended Varshney at Mumbai’s Chhatrapati Shivaji Maharaj International Airport as he attempted to flee to Colombo, Sri Lanka. The development brings renewed hope to thousands of victims who lost substantial sums in one of India’s largest alleged Ponzi schemes promising crypto profits.

Dramatic Airport Interception

Immigration officials detained Varshney on March 9 as he was attempting to board an international flight. They acted swiftly, based on an existing Lookout Circular that identified him as someone evading authorities. The CBI took him into custody the same day and completed the arrest process the following morning.

As the Chief Technology Officer of Darwin Labs, Varshney allegedly played a pivotal role in developing the technology that supported GainBitcoin operations. His responsibilities included creating smart contracts, managing digital wallets, developing the GBMiners mining pool interface, and setting up payment gateways that enabled investors to participate and transfer funds.

The CBI has charged him with conspiracy, cheating, and criminal breach of trust under the Indian Penal Code, as well as digital fraud under the Information Technology Act. Meanwhile, ongoing nationwide searches, including major operations in February 2025 that seized millions of dollars in cryptocurrency, highlight the seriousness of the investigation, which is under the supervision of the Supreme Court.

The Ponzi Operation

The GainBitcoin scheme was launched in 2015 by Amit Bhardwaj and his brother Ajay, through a company called Variabletech Pte. Ltd. The launch attracted investors in India, promising 10% monthly returns through cloud-based bitcoin mining. Many invested through websites such as gainbitcoin.com and related platforms, often introduced to the scheme through multi-level marketing, seminars, and events.

Initially, payouts in Bitcoin helped build trust among investors. However, the scheme soon changed to a proprietary token, MCAP, which rapidly lost value, indicating the plan was unsustainable. It is estimated that the fraud involved over $2.1 billion and affected around 8,000 direct victims.

In a twist of events, Amit Bhardwaj was arrested in 2018 and later released on bail, but passed away in 2022, complicating recovery efforts for the victims. Initial complaints were filed with local police in Pune, but the case eventually transferred to the Central Bureau of Investigation (CBI) due to its broader impact.

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