Indian crime officials being probed in major Bitcoin scam

Several officers, including an Inspector General of Police (IGP) from the Crime Branch of India, are being investigated by the Special Investigation Team (SIT) in connection with a Bitcoin scam.

The SIT issued a notice to Inspector General of Police (IGP) Sandeep Patil, then head of the Crime Branch, to clarify inconsistencies in the investigation into the Bitcoin scam.

The scam involves hacker Srikrishna Ramesh, also known as Sriki, and his partner Robin Khandelwal. Sikri, the mastermind behind the scam, hacked Unocoin, a cryptocurrency exchange, in 2017 and stole 60.6 Bitcoins worth Rs 1.14 crore (about $137,000) at the time. He also hacked various other online platforms and laundered funds using cryptocurrency.

Sriki then traded 150 Bitcoins worth ₹5.5 crore through Khandelwal. The duo was first arrested in 2020 on charges of ordering drugs online using Bitcoin.

According to the first information report (FIR) filed by the SIT in January, four former Crime Branch officers, Sridhar Poojar, Prashanth Babu, Chandradhar SR and Lakshmikanthaiah, and Santhosh Kumar, a private cyber expert, are accused of illegal confinement. , breach of trust by a public official and destruction of evidence related to Bitcoin fraud.

The allegations include manipulating the investigation to cover up the misuse of Bitcoins seized during the investigation.

Researchers initially claimed to have found 31 Bitcoins worth 9 crore from Sikri and 0.08627702 BTC from Khandelwal. However, these Bitcoins were not found.

The explanation offered was that Sriki “manipulated the Bitcoin core implementation to mislead the investigation.” Despite this claim, the Crime Branch did not investigate further details of how and when the manipulation took place.

Further, SIT’s findings show that Inspector Chandradhar detained Khandelwal and forced him to transfer money from his account to crypto exchange Wazirx to buy Bitcoin.

This was allegedly done to compensate for the Bitcoins that the Crime Branch could not recover from Khandelwal, who was draining crypto resources.

The SIT is also investigating Additional Director General of Police (ADGP)’s son Rishab for his alleged involvement in the scam. He is accused of using illegal money obtained through Bitcoin trading. The SIT alleges that Sriki received a check of Rs 40 lakh during his active period and used the money to buy a car.

This development comes as India has seen a rise in cryptocurrency-related scams over the years. Earlier this month, the country’s Enforcement Agency busted two major frauds and seized over $30 million.
Before that, the ED teamed up with the FBI to bust a $360 million drug trafficking ring backed by cryptocurrencies.