Karnataka CID’s SIT Makes Key Breakthroughs in Bitcoin Scam Investigation
After months of investigation, the Special Investigation Team (SIT) of Karnataka’s Criminal Investigation Department (CID) has made significant progress in the Bitcoin scam case. The SIT has gathered digital evidence suggesting that police officers from the Bengaluru Crime Branch may have accessed Bitcoins worth crores of rupees that were found in the possession of hacker Srikrishna Ramesh, also known as Sriki, who was arrested in November 2020.
Political Ramifications of the Bitcoin Scam
The Bitcoin scam, which took place during the BJP tenure of 2019-2023, is said to have political ramifications in Karnataka. The SIT was constituted by the new Congress government in July 2023 after allegations of large-scale corruption by the police in handling the cases. The recent breakthroughs in the investigation have led to the arrest of a police officer and a private cyber expert, as well as the naming of three other police officers in a First Information Report (FIR) registered by the CID police on January 24.
Key Findings of the Investigation
The SIT has made several key findings during its investigation. One of the crucial discoveries includes the recovery of a new laptop that was purchased at the request of the arrested police officer Babu and was used by Sriki while he was in police custody. Additionally, three nano ledgers or hardware crypto wallets were procured on behalf of the arrested cyber expert Kumar, which were allegedly used to transfer a large amount of Bitcoins from Sriki’s cloud wallets.
Utilization of Private Cyber and Crypto Experts
The SIT has also found evidence suggesting that police officers sought the assistance of private cyber and crypto experts to erase the digital access history of the crypto wallets stored on an Amazon Web Services (AWS) cloud server by Sriki. The involvement of these experts has hindered the investigation and made it difficult to trace the missing Bitcoins.
Puzzling Timeline Raises Questions
The investigation has uncovered a puzzling timeline of events related to the case. For instance, on January 6, 2021, the arrested cyber expert Kumar allegedly transferred Bitcoin worth Rs 1.86 lakh from a crypto wallet belonging to Sriki’s associate. This transfer was made after gaining unauthorized access to the wallet by changing the passwords. Furthermore, the 31 Bitcoins that were seized from Sriki on January 8, 2021, disappeared when the police wallet was opened on January 22, 2021.
Hacker’s Allegations and Veracity
Hacker Sriki has made allegations that he was in possession of 400 Bitcoins, which he claims he was pressured into giving away by the police. The SIT has stated that further investigation is needed to ascertain the veracity of Sriki’s allegations. They believe that the digital trail left behind by cybercrimes will eventually provide leads, contributing to the ongoing investigation.
Legal Proceedings and Denial of Bail
The recent developments in the case have led to the arrest of police officer Prashant Babu, who was previously in charge of the technical support team to the Bengaluru Central Crime Branch, and cyber expert Santhosh Kumar K S, CEO of private firm Group Cyber ID Technologies. The SIT has filed an FIR naming three other police officers who are accused of illegal confinement, breach of trust, and destruction of evidence. Poojar, one of the named officers, was denied interim anticipatory bail by a special court, while the co-founders of Unocoin Technologies were granted anticipatory bail after being summoned for investigation by the SIT.
Analyst comment
Positive news for the market as the investigation into the Bitcoin scam progresses. The arrests and FIR indicate the government’s commitment to address corruption. However, the involvement of private experts and missing Bitcoins raise concerns. Market may see increased scrutiny of crypto transactions and potential regulatory measures.
