A Special Investigation Team (SIT) is currently probing several officers from the Indian Crime Branch, including an Inspector General of Police (IGP), in connection with a Bitcoin scam.
IGP Sandeep Patil, who was the head of the Crime Branch at the time, has been issued a notice by the SIT to clarify discrepancies in the investigation related to the scam.
Hacker Srikrishna Ramesh, also known as Sriki, and his associate Robin Khandelwal are at the center of a Bitcoin scam investigation. Sriki orchestrated the scam by hacking into Unocoin, a cryptocurrency exchange, in 2017 and stealing 60.6 Bitcoins valued at ₹1.14 crore (approximately $137,000) at the time. He also targeted several other online platforms and used cryptocurrency to launder the stolen funds.
Sriki then engaged in trading 150 Bitcoins worth ₹5.5 crore with Khandelwal. The duo’s criminal activities came to light in 2020 when they were arrested for using Bitcoin to purchase drugs online.
A first information report (FIR) filed by the Special Investigation Team (SIT) in January implicates four former Crime Branch officers—Sridhar Poojar, Prashanth Babu, Chandradhar SR, and Lakshmikanthaiah—as well as Santhosh Kumar, a private cyber expert. They face charges including illegal confinement, breach of trust by a public servant, and destruction of evidence related to the Bitcoin scam.
The accusations involve manipulating the investigation to conceal the misappropriation of recovered Bitcoins during the probe.
Initially, investigators reported the discovery of 31 Bitcoins worth 9 crores from Sikri and 0.08627702 BTC from Khandelwal. However, these Bitcoins were not found later. The explanation given was that Sriki had manipulated the Bitcoin core application to mislead the investigation. Despite this explanation, the Crime Branch did not delve deeper into the specifics of the manipulation’s occurrence and timing.
Moreover, based on the SIT’s findings, Inspector Chandradhar detained Khandelwal and compelled him to transfer funds from his account to the crypto exchange Wazirx for buying Bitcoins.
This action was purportedly taken to make up for the Bitcoins that the Crime Branch failed to retrieve from Khandelwal, who had depleted his cryptocurrency reserves.
The SIT is also examining Rishab, who is the son of an Additional Director General of Police (ADGP), regarding his suspected involvement in the scam. He is accused of using illicit funds obtained through Bitcoin trading. According to the SIT, he received a check for ₹40 lakh during the timeframe when Sriki was operating actively, and he purportedly used this money to buy a car.
India has witnessed an increase in cryptocurrency-related scams over the years, leading to recent enforcement actions. Just this month, the country’s Enforcement Directorate took action against two significant scams, resulting in the seizure of over $30 million.
Therefore, before that, the Enforcement Directorate (ED) partnered with the FBI to dismantle a drug trafficking network valued at $360 million, which was facilitated by cryptocurrencies.
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