MiningPool uncovered the link between GBMiners, an emerging bitcoin mining pool, and GainBitcoin, a Ponzi scheme operating out of India. Darwin Labs, the software vendor for GBMiners, severed its rel
MiningPool uncovered the link between GBMiners, an emerging bitcoin mining pool, and GainBitcoin, a Ponzi scheme operating out of India. Darwin Labs, the software vendor for GBMiners, severed its relationship with the mining operation following this disclosure.
The connection traces to Amit Bhardwaj. He founded GBMiners and served as a key promoter of GainBitcoin. Beyond mining, Bhardwaj engaged Darwin Labs on multiple fronts: Coinbank, a bitcoin wallet; the Bitcoin Growth Fund, an investment vehicle; and Satoshi Studios, a blockchain incubator in southeast Asia.
Whether Darwin Labs grasped the scope of the GainBitcoin scheme during its work with GBMiners and Bhardwaj remained unclear.
When MiningPool first revealed the connection, Darwin Labs CEO Sahil Baghla offered no response. In a subsequent LinkedIn post, he addressed the rationale behind the partnership. "It is our lack of understanding of the subject that led us to work for GBMiners as a software vendor without understanding their source of funds or their business model," Baghla wrote.
That same post also conveyed Darwin Labs's position on future dealings. "Darwin Labs, it's founders or employees are not associated with GBMiners anymore, which implies we are not even their software vendors anymore," Baghla stated. "We have absolutely no commercial [or] professional relationship with GBMiners or Amit Bhardwaj at all." He emphasized that Darwin Labs did not "wish to pass judgements on someone else's way of working," framing the split as a response to mounting negative press around Bhardwaj.
"We are not fully aware of the workings of GainBitcoin or even the relationship between GainBitcoin and GBMiners," Bhardwaj added in his response.
Video evidence contradicted this claim. Bhardwaj appeared in YouTube videos promoting GainBitcoin as an investment. After MiningPool published its investigation, the videos disappeared from YouTube. MiningPool had preserved copies on its YouTube channel, but a copyright holder removed those as well through a takedown notice.
Baghla tied Darwin Labs's involvement with Bhardwaj to the company's gaps in mining expertise. "Bitcoin mining requires a special hardware which stores and validates the transaction in Bitcoin's Blockchain," he explained. "We are not subject experts on hardware operations involved in mining or its economic viability and have very little understanding of the matter."
Satoshi Studios, the blockchain incubator Darwin Labs had founded, refunded all capital raised from Bhardwaj and other investors. Darwin Labs assumed funding the project going forward. Its advisory roster included prominent names such as Jed McCaleb, original founder of Mt. Gox, and Michael Terpin, who co-founded BitAngels.
Darwin Labs had also developed the Bitcoin Growth Fund and Coinbank with Bhardwaj. Coinbank provides 1 percent monthly returns on bitcoin deposits.
Update: This article linked to a YouTube channel containing the videos. After publication, a copyright holder removed those copies via takedown notice. The publication now hosts them on its website.
