The Congress government in Karnataka is all set to resume the investigation into the multi-crore Bitcoin scam involving international hacker Srikrishna alias Sriki, which had created a political uproar at the national level in 2021 and 2022. The alleged scam involves senior police officers and several politicians. The Siddaramaiah-led state government is likely to hand over the case to the CID. Currently, the prime accussed in the Bitcoin scam, Sriki, has been evading the police, but a search operation to nab him is underway.
Speaking to Republic on the matter, Home Minister Dr G Parameshwara said that “We will thoroughly re-investigate the bitcoin scam. We will soon decide whether the case should be handed over to the CID or not. The CID is currently effective, and therefore they will go ahead with the investigations, and other agencies will assist them.”
However, a contradictory statement was made by Rural Development and Panchayat Raj Minister Priyank Kharge, who said that handing over the probe into the Bitcoin scam to the CID meant “giving the keys of the house to the thief”.
Meanwhile, Bengaluru Police Commissioner B Dayanand has written a letter and requested DG-IGP Alok Mohan to appoint a special investigation team to look into the issue. Home Minister Parameshwara also said, “I have held two meetings with police officers in connection with the Bitcoin scam. To whom has the money been transferred’ Crores of rupees have been illegally collected. A detailed investigation needs to be conducted into how the money was transferred. We will throw light on the entire scam.”
The previous CID inquiry
The CID probe had earlier revealed that evidence in connection with the bitcoin transfer had been destroyed. The probe suggested that there was no need to further conduct an analysis by forensic experts to investigate whether the digital evidence was destroyed or not. Later, a report was submitted by CID officials that stated that the technical details would be available only after scrutiny by FSL experts. However, there have been allegations that the case was closed without giving it to forensic experts because of the involvement of some police officers and politicians.
Hacker Sriki had swindled government portals of Rs 11.55 crore
In 2019, Sriki hacked the state government’s e-procurement website and succeeded in stealing Rs 11.5 crore, according to a chargesheet filed by the police in 2021. CID officials, who investigated the case, blocked 14 bank accounts of Sriki and NGOs involved in the irregularities and recovered Rs 1.44 crore from them. It was confiscated. He hacked the government portals and transferred the money to the bank accounts of the NGOs Udaygram Vikash Sanstha in Nagpur and Nimmi Enterprises in Uttar Pradesh. Investigations later revealed that Sriki had received money from the NGOs.
How did the Bitcoin scam come to light?
On November 18, 2020, the Central Crime Branch (CCB) police arrested hacker Sriki in connection with the Sandalwood drugs case. It came to light that Sriki had purchased drugs through international dealers on a dark website by using bitcoins. During interrogation, Sriki revealed that several websites had been hacked. The CCB officials had said that they had seized 31 bitcoins from Sriki’s crypto wallet. However, the then commissioner, Kamal Pant, said that no coins were confiscated and that it was alleged that the bitcoins in Sriki’s wallet were transferred to different wallets and that evidence was destroyed.
“Let the bitcoin scam be investigated from all angles. Those who have done wrong should be punished. Let them start an investigation instead of threatening to investigate,” BJP leader and former Home Minister Araga Jnanendra told Republic.
Sriki’s link to the Morgan case
The 26-year-old hacker was also found involved in the case of New York-based couple Lichtenstein and Heather Rehnan Morgan, who were arrested in the US in connection with the massive cryptocurrency scam. In August 2016, a couple hacked the bitcoin website for cryptocurrency trading and stole 1,19,754 bitcoins worth $71 million (Rs 7.10 crore).
Bengaluru Commissioner of Police B Dayanand has said, “Cases have been registered at Cottonpet police station in connection with the bitcoin scam. Its network is suspected to have spread nationally and internationally. The act was committed by experts in technical forensics. An investigation into Bitcoin is already underway. Apart from that, I have requested the DG-IGP conduct a further investigation. The government’s procurement website was also hacked. It was found that national and international hackers had joined hands. The scope of this has increased, and I have requested a high-level probe by the Special Investigation Team. The DG-IGP will decide which agency to conduct the investigation.”
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