The Indian Crime Branch is currently under investigation by a Special Investigation Team (SIT) regarding a Bitcoin scam, involving several officers, including Inspector General of Police (IGP) Sandeep Patil. The SIT has issued a notice to Patil, who was heading the Crime Branch at the time, to address discrepancies in the investigation of the scam.
The scam revolves around hacker Srikrishna Ramesh, also known as Sriki, and his associate Robin Khandelwal. Sriki, the mastermind behind the scheme, hacked the cryptocurrency exchange Unocoin in 2017, stealing 60.6 Bitcoins valued at ₹1.14 crore (approximately $137,000 at that time). He went on to hack various other online platforms and launder the funds using cryptocurrency.
Sriki then traded 150 Bitcoins worth ₹5.5 crore through Khandelwal. The duo was initially arrested in 2020 for allegedly purchasing drugs online using Bitcoin.
In a first information report (FIR) filed by the SIT in January, four former Crime Branch officers – Sridhar Poojar, Prashanth Babu, Chandradhar SR, and Lakshmikanthaiah – along with private cyber expert Santhosh Kumar, are facing charges of illegal confinement, breach of trust by a public servant, and destruction of evidence related to the Bitcoin scam. They are accused of manipulating the investigation to conceal the misappropriation of the recovered Bitcoins.
Despite initial claims by investigators that they had recovered 31 Bitcoins worth ₹9 crores from Sriki and 0.08627702 BTC from Khandelwal, these Bitcoins were nowhere to be found. The SIT believes that Sriki manipulated the Bitcoin core application to mislead the investigation, but the Crime Branch failed to delve deeper into this manipulation.
Furthermore, the SIT’s findings suggest that Inspector Chandradhar allegedly took Khandelwal into custody and forced him to transfer money from his account to the crypto exchange Wazirx to buy Bitcoins. This was supposedly done to make up for the missing Bitcoins that the Crime Branch couldn’t locate, as Khandelwal had depleted his crypto resources.
The SIT is also looking into Rishab, the son of an Additional Director General of Police (ADGP), for his supposed involvement in the scam. He is accused of using illegally acquired funds from Bitcoin trading, receiving a ₹40 lakh cheque during Sriki’s active period, which he used to buy a car.
This investigation comes at a time when India has seen a surge in cryptocurrency-related scams. Recently, the Enforcement Directorate cracked down on two major scams, seizing over $30 million. Prior to that, the ED collaborated with the FBI to dismantle a $360 million drug trafficking ring facilitated by cryptocurrencies.
In a separate incident, a new job recruitment crypto scam has emerged in India, adding to the growing concerns surrounding digital currency fraud.