Bitcoin
Indian crime authorities being investigated in major Bitcoin scam
Several officers of the Indian Crime Department, including an Inspector General of Police (IGP), are being investigated by a Special Investigation Team (SIT) in connection with a Bitcoin scam.
The SIT has published a notice to Inspector General of Police (IGP) Sandeep Patil, head of the Crime Branch at the time, to clarify discrepancies in the investigation of a Bitcoin scam.
The scam involves hacker Srikrishna Ramesh aka Sriki and his associate Robin Khandelwal. Sikri, the mastermind behind the scam, hacked a cryptocurrency exchange, Unocoin, in 2017 and stole 60.6 Bitcoins worth ₹1.14 crore (approximately $137,000) at the time. He also hacked several other online platforms and laundered funds using cryptocurrency.
Sriki then traded 150 Bitcoins worth ₹5.5 million via Khandelwal. The pair were initially stuck in 2020 on charges of ordering medication online using Bitcoin.
According to a first information report (FIR) filed by the SIT in January, four former Crime Branch officers, Sridhar Poojar, Prashanth Babu, Chandradhar SR and Lakshmikanthaiah, along with Santhosh Kumar, a private cyber expert, are being accused of illegal confinement. , breach of trust by public official and destruction of evidence related to the Bitcoin scam.
The allegations include manipulation of the investigation to cover up the misappropriation of Bitcoins recovered during the investigation.
Investigators initially claimed to have found 31 Bitcoins worth 9 crores from Sikri and 0.08627702 BTC from Khandelwal. However, these Bitcoins were not found.
The explanation provided was that Sriki had “rigged the main Bitcoin application to mislead the investigation.” Despite this allegation, the Criminal Division did not further investigate how and when the manipulation occurred.
Furthermore, the SIT’s findings indicate that Inspector Chandradhar arrested Khandelwal and coerced him into transferring money from his account to cryptocurrency exchange Wazirx to buy Bitcoins.
This would have been done to compensate for the Bitcoins that the Criminal Division was unable to recover from Khandelwal, who had exhausted his cryptographic resources.
The SIT is also investigating Rishab, son of an Additional Director General of Police (ADGP), for his alleged involvement in the fraud. He was accused of using illegal money acquired through Bitcoin trading. The SIT alleges that he received a check for ₹40 lakh during the period when Sriki was active and that he used this money to buy a car.
The development comes at a time when India has seen a rise in cryptocurrency-related scams over the years. Earlier this month, the country’s Enforcement Directorate repressed in two major scams and seized more than US$30 million.
Before that, the ED collaborated with the FBI to take down a $360 million drug trafficking network fueled by cryptocurrencies.