What is the Raj Kundra Bitcoin Fraud? How Was ED Probe Started? Additional Cases Against the Husband of Shilpa Shetty

As part of a money laundering probe, the Enforcement Directorate (ED) attached Raj Kundra’s properties, which included a residential property in Juhu, Mumbai, a house in Pune, and equity shares valued at Rs 98 crore. Kundra is a businessman and the husband of Hindi film star Shilpa Shetty.

Four women alleged that they were coerced into filming pornographic material after being offered an acting role in a web series, leading the Mumbai Police to arrest Kundra in July 2021. September saw his release from Arthur Jail.

Supposed Gain Bitcoin Ponzi Scheme: What Is It?
In 2017, Bitcoin attracted investors with the prospect of enormous profits. The Gain Bitcoin Ponzi scam was started by Ajay, Mahender, and Amit Bhardwaj via a business named Variable Tech Pte Ltd.

After many FIRs were filed by the Delhi and Maharashtra Police, underscoring the plea of investors, the fraud came to light.

Investigators claim that the founders of Variable Tech promised to utilize investor Bitcoins worth Rs 6,600 crore (at the time) for Bitcoin mining in order to provide profits on crypto assets of 10% per month. They promised investors large profits at first, but then they began to falter.

HOW IS THE PONZI SCHEME APPLIED?
A ponzi scam, according to Investopedia, gives early investors money by using funds acquired from later investors to provide the impression of success. As new investors learn about the significant profits made by early investors, it depends on word-of-mouth. It becomes impossible to distribute the earnings to investors when the money flow slows down, leading to the final collapse of the plan.

Charles Ponzi, a con artist, is credited with giving the Ponzi Scheme its name in 1920. He promoted a fictitious investment offer and made himself a billionaire. In 1919, Charles Ponzi came up with his first scam, which was centered on international mail and the US Postal Service. A letter with pre-paid international postage arrived from someone in Spain. You might use this international postage reply voucher to swap postage in the US for sending a reply letter back to Spain. This thought came to Ponzi.

Eventually, it was found that he was really collecting money from investors and paying enough of it to keep the fraud continuing, and that he only had $61 worth of the postal coupons.

ED’S WAY OF STARTING AN INVESTIGATION?
In 2018–19, a few victims went to the Delhi and Maharashtra Police and filed many FIRs. For suspected investment fraud, criminal proceedings were brought against Variable Tech Pte Ltd, its promoters Amit, Ajay, Vivek, Simpy, and Mahender Bhardwaj, as well as a number of multiple level marketing (MLM) agents.

In accordance with the Prevention of Money Laundering Act (PMLA), the ED filed an Enforcement Case Information Report (ECIR), which is comparable to a formal complaint. The ED claims that the promoters defrauded investors of 10% of their promised bitcoins by hiding their illicitly obtained holdings in secret online wallets.

IN WHAT WAY WAS RAJ KUNDRA INVOLVED?
The ED claims that in exchange for Raj Kundra establishing a Bitcoin mining farm in Ukraine, Amit Bhardwaj, the creator and marketer of the Gain Bitcoin Ponzi scheme, gave him 285 bitcoins.

The aforementioned Bitcoins were purportedly obtained by Amit Bhardwaj’s theft of money from naive investors. The 285 bitcoins, worth over Rs 150 crore, are still under Kundra’s control despite the fact that the trade did not go through, according to ED.

But Kundra is not the primary defendant in this case. In June 2018, the ED asked him a series of questions.

OTHER RAJ KUNDRA-RELATED CASES
In February 2021, a pornography ring that produced and distributed pornographic movies on over-the-top platforms was caught by the Mumbai Police. The cops initiated a series of raids. During this period, Raj Kundra was mentioned by the four women under police investigation as part of the purported scam. Actresses Sagarika Shona Suman, Sherlyn Chopra, and Poonam Pandey leveled several severe accusations against Raj Kundra.

Together with his wife, Shilpa Shetty, Raj Kundra purchased the Rajasthan Royals franchise in the Indian Premier League. However, in 2013, three of the team’s players—Sreesanth, Ajit Chandila, and Ankit Chavan—were charged with match-fixing and taken into custody by the Delhi Police. ICC Chief Srinivasan’s son-in-law Gurunath Meiyappan and team owner Kundra were also charged with betting and spot-fixing. After that, Kundra admitted to the police that she had placed a wager via a bookmaker. The team was disqualified and Kundra and Meiyappan were suspended. Kundra was also barred from taking part in any cricket-related activities. Due to a dearth of evidence, he was eventually awarded a clean sheet in the case.