Enforcement Directorate (ED), India's intelligence agency responsible for fighting economic crimes, questions several celebrities with regards to their involvement in a cryptocurrency scam, led by entrepreneur Amit Bhardwaj.
Bhardwaj founded a series of Bitcoin mining companies such as Gain Bitcoin, GB Miners, and MCAP, promising investors a 10 times return. Since none of his promise panned out, investors lost their money. As a result, Bhardwaj was arrested in by Indian police April.
At that time, he was in the Delhi Airport on his arrival from Bangkok. Bhardwaj was charges of allegedly cheating 8,000 people across the country, scamming them $300 million.
After interrogating Bhardwaj, the authorities started questioning those who were associated and involved with him and his companies.
The first to fall under ED's radar was Raj Kundra, a British businessman who does most of his business in India. He was questioned because the ED found several transactions made between Bharadwaj and Kundra’s firms.
Before detaining Bhardwaj, tha authorities have arrested Hemant Vishwas, Hemant Babasaheb Chavan, Ajay Tanaji Saheb, Pankaj Srinandkishore and Chandrakant Bhope. And later, Darwin Labs founders Sahil Baghla (former Bluegape founder) and Nikunj Jain (former Frankly.me founder and an angel investor) had been arrested in connection with Amit Bhardwaj.
The scam news first came to light when Zakhil Suresh, a Gain Bitcoin investor, had started a petition on Change.org. Signed by more than a thousand people, the petition appealed for Bhardwaj’s arrest for alleged fraudulent schemes. The Gain Bitcoin scam was then regarded as one of the biggest Bitcoin scams.
After questioning Kundra, the authorities then questioned Indian celebrities who had promoted Bhardwaj's companies at various events overseas, like in Dubai and Singapore.
They include Kundra's wife Shilpa Shetty, Prachi Desai, Aarti Chabria, Sonal Chauhan, Karishma Tanna, Zareen Khan, Neha Dhupia, Huma Qureshi, Nargis Fakhri, as well as Karenjit Kaur Vohra, or better known as Sunny Leone, a retired porn star turned Bollywood actress.
These celebrities were questioned about their promotional activities in relation to Bharadwaj’s companies.
This case isn't the first time that celebrities get into troubles for promoting cryptocurrency projects or initial coin offerings (ICOs) that prove to be fraudulent. Previously, Floyd Mayweather, DJ Khaled, and Steven Seagal have all been there.
These cases have led the U.S. Securities and Exchange Commission (SEC) to issue a warning against celebrity-backed ICOs starting December 2017, saying that such sponsored endorsements are illegal, if the celebrity fails to disclose their relationship (or stake) with the crytpcurrency companies they are involved in..
