A single judge bench of the Karnataka High Court has clarified that no interim order has been granted by the court in cases filed to quash probes against a gang involved in the hacking of cryptocurrency exchanges, online poker sites and the state e-governance sites.
The High Court issued the oral clarification during the hearing of pleas filed by a hacker Srikrishna Ramesh alias Sriki and three associates Sunish Hegde, Prasidh Shetty and Hemanth Mudappa for quashing of investigations against them in two separate cases filed by the Bengaluru Central Crime Branch police and the Criminal Investigation Department for hacking of Bitcoin exchanges and a state e-portal.
The petitions filed earlier in 2021 and 2023 for the quashing of cases against the hacking gang came up for hearing in the High Court on Thursday even as the new Congress government ordered the creation of an SIT on June 30 for further investigations into these cases that occurred during the BJP’s tenure.
Earlier in September 2022, the High Court had stated during two hearings that “interim order granted earlier, is extended till the next date of hearing”. The court, however, clarified on Thursday that there were no interim orders granted earlier in the petitions filed for quashing of the cases.
The clarification from the High Court came amid doubts on whether the SIT constituted by the new Congress government could carry out investigations into the hacking related crimes and alleged corruption in the handling of the cases by the police and state officials during the BJP rule from 2019 to 2023.
In one of the cases, Sriki is accused of hacking crypto exchanges and online poker sites to make illegal wealth for himself and his associates. In a second case, he is accused of hacking into the Karnataka government’s e-procurement cell to steal Rs 11.5 crore of funds which was later converted into cash through an elaborate laundering network involving hawala transactions.
In a hearing in March 2022, a senior counsel for the accused argued that the hacking crimes of the gang were noticed by the police while probing a drug case and that the hacking case was taken up without evidence and materials as an afterthought by the police.
On Thursday, the High Court posted the case to July 19 for further hearing.
Notably, Home Minister G Parameshwara had said recently, “Earlier when the BJP was in power, a Bitcoin scam running into lakhs of rupees was reported to have occurred through virtual transfers with several people involved in the transactions and the issue was hushed up without proper investigations.”
“Before we came to power, we had stated that we would conduct further investigations into the Bitcoin scam. We have done as stated. An SIT is being formed in the CID and an order has been issued to this extent to form an SIT,” Parameshwara had said.
In November 2020, the Central Crime Branch of the Bengaluru police had stumbled upon the suspected possession of a large quantity of Bitcoins by Sriki following his arrest in a case of procuring drugs over the darknet using crypto currency.
The hacker, who was a central figure in a 2019 pub brawl involving a Congress leader’s son, claimed to have hacked multiple exchanges for Bitcoin.
The investigations in the drug case led to the CCB filing cases against the hacker and his high profile associates for allegedly hacking online poker sites and cryptocurrency exchanges to acquire wealth through illegal means. The CCB investigations were, however, hit by allegations of corruption and diversion of crypto currency found in the possession of the hacker gang.
The CCB probe initially claimed to have recovered 31 Bitcoins worth Rs nine crore from the hacker but the police later claimed to have been duped by the hacker into believing that cryptocurrency located at an exchanges was transferred to an online seizure wallet created by the police to hold the Bitcoins recovered from the hacker.
The arrest of the hacker in November 2020 in the drug case by the CCB also revealed his role in a July 2019 hacking of the state e-procurement cell where Rs 11.5 crore was stolen. The CCB probe in 2020 revealed that a gang featuring Sriki was behind the e-procurement cell hack in 2019.
The CID filed a charge sheet on December 15, 2021 against Sriki and 17 others for the 2019 heist at the state e-governance cell. The CID filed charges under theft, receiving of stolen property, disposal of stolen property, causing disappearance of evidence, destruction of evidence and criminal acts against the accused.
The CCB filed a charge sheet on February 2, 2021 following investigations into the alleged hacking of multiple exchanges and poker sites. The Enforcement Directorate (ED), which investigated the money laundering angle in the hacker gang case, filed a charge sheet with respect to the Rs 11.5 crore e-procurement cell theft on July 3 this year even as the state created an SIT.
While Rs 1.43 crore of the Rs 11.5 crore stolen from the e-procurement cell has been recovered by the ED, there has been no other major recovery of stolen funds or cryptocurrencies by the police agencies so far.
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