PM Modi’s biggest policy decision of demonetization to tackle black money has spawned numerous insurmountable black money scams that makes one wonder if demonetization was actually to empower unscrupulous players in India’s varied but volatile financial sector. With doubtful checks and balances, experts have been baffled about the aim of such a step and all evils associated with it have started surfacing in the aftermath that followed.
Gujarat’s Bitcoin scam that started in Surat is now threatening to snowball into a much bigger scam than initially anticipated. Surat invariably finds it’s coveted place in any controversy, for right or wrong reasons. Be it Patidar agitation, GST voes and anti voices, EVM malfunctions on a massive scale during Gujarat elections, Surat EVMs used in recently concluded UP, Maharashtra by polls or the ill fated bitcoin scam now.
Bitcoin saga began from a complaint made to Gujarat’s junior Home Minister Pradeepsinh Jadeja by one Shailesh Bhatt against Gujarat’s Amreli district Police alleging extortion of Rs 12 crores worth bitcoins by police themselves. Gujarat Police’s CID branch began investigation in the case and quickly found out that the complainant Shailesh Bhatt who complained against Amreli Police himself is a bigger extortionist who had extorted bitcoins worth Rs 155 crores. Amreli Police had kidnapped Shailesh Bhatt and extorted Rs 12 crores worth of bitcoins themselves. Amreli Superintendent of Police Jagdish Patel and Police Inspector Anant Patel have been arrested by CID already so far. Former BJP legislator Nalin Kotadia who is allegedly the fixer between the scamsters is on the run.
Bitconnect Investment Company’s origin goes back two years ago. Bitconnect was started promising massive returns on investment up to 4% daily. Shailesh Bhatt, a Surat based builder was an original investor investing to the tune of Rs 155 crores lured by high yield. The promoters are alleged to have gained on woes faced by businessmen around ill conceived demonetization that brought entire country to a grinding halt. The cash crunch triggered economic slowdown motivated beleaguered businessmen alike to invest in ‘Get rich fast’ schemes like the one promised by Bitconnect and it’s promoters. The added advantage of slipping through the net of traditional financial system with virtual currency without footprints and staggering returns in a recession hit economy worked like the best recipe. Shailesh Bhatt soon turned into an agent from an independent investor luring others.
Things were going good until a financial recession around end 2017 started diminishing returns. The promoters began falling out and disputes led to breakdown of the company. Shailesh Bhatt kidnapped one Piyush Savalia who was associated with Bitconnect on 30th January and released two days later. Shailesh Bhatt then kidnapped Dhaval Mavani who was able to transfer 2256 bitcoins worth Rs131 crores to Shailesh Bhatt securing his release. Bhatt secured another Rs 10 crores worth bitcoins before being stung by Amreli Police. Amreli Police SP and his accomplice PI seized this opportunity and extorted Rs 12 cores worth bitcoins from Bhatt which sparked unraveling this entire scam. CID started working on Home Minister Jadeja’s instructions and began investigation netting Amreli Police officers. But to CID’s surprise the probe revealed much bigger names and amounts involved in this scam. That’s when the investigation’s net has widened now and a slew of names are waiting to tumble out soon.
Divyesh Darji is the mastermind believed to have floated Bitconnect with 12 directors and registering the company originally in London with just Rs 1 lakh capital. One Kirit Paladia and builder Shailesh Bhatt have been arrested by CID but they appear as small fish with bigger ones bolted already. So far the CID has recovered Rs 6 crores in cash, 169.42 bitcoins (At it’s peak a single bitcoin was worth $ 20,000), 8 KG Gold worth Rs 17.44 crores.
At least Rs 5000 crores worth of black money was converted immediately after demonetization in Surat alone into cryptocurrencies. Surat is the financial hub of textile and diamond business with millions affected in a double whammy post demonetization and GST. Cruptocurrencies offered a new lifeline to millions of people gullible enough to believe fairy tales of prosperity and escape from woes of cash crunch, high cost of living and spiraling commodity prices. Especially when the politicians they trusted weave such dreamlike stories, how can people not fall for such grandiose scams when the same politicians peddle it with promises of Rs 15 lakhs each and 4% return per day?
It needs to be seen now where this investigation leads to and which big names are involved. Whether any big revelation and arrests will be made or a massive cover up will once again make this an obscure scam that becomes a mysteriously closed file on the shelf.