The Karnataka police’s Special Investigation Team (SIT) is struggling to gather information from 25 international cryptocurrency exchanges and gaming sites. This inquiry stems from the claims of an arrested hacker. He allegedly stole cryptocurrency worth crores of rupees.
The SIT is investigating a major Bitcoin scam involving the hacker, Srikrishna Ramesh, also known as Sriki. He is 29 years old and has been accused of hacking multiple cryptocurrency exchanges. Over the last year, the SIT sent requests for information through the Mutual Legal Assistance Treaty. They aimed to find out about the hacks on online systems.
The SIT wants to know if the stolen funds were used to pay police officials and others. Sriki was arrested in November 2020 for buying illegal drugs from the dark web using Bitcoin.
A police official stated, “There has not been much response from cryptocurrency exchanges regarding the information we sought. One online poker site indicated a data breach but not a loss of funds.”
The reluctance to share data may come from fears about exposing security vulnerabilities at the exchanges, according to an SIT source.
After his arrest, Sriki claimed he had hacked multiple exchanges between 2016 and 2020. He said he used the stolen Bitcoins to live a luxurious life with his associates. He also claimed to have given a large amount of cryptocurrency to police officials after his arrest. The crime branch held Sriki and his accountant, Robin Khandelwal, for nearly two months but did not report recovering any stolen cryptocurrency.
In June 2023, the Congress government formed the SIT to investigate allegations of corruption involving crime branch policemen and political leaders. This corruption was linked to handling Sriki’s cases during the previous BJP government’s tenure from 2019 to 2023.
The SIT argued against granting bail to two police officers accused in the scam. They stated that Sriki had over 4,000 Bitcoins, valued at Rs 850 crore, at the time of his arrest. Evidence shows that Sriki hacked the Unocoin cryptocurrency exchange in June 2017, stealing 60.6 Bitcoins worth Rs 1.14 crore. An SIT official confirmed, “We have evidence from the hacker’s laptop to verify the Unocoin hack.”
Between 2016 and 2020, the hacker and his associates dealt with large sums of money for travel, car purchases, charter flights, and stays at luxury hotels. The SIT suspects that the source of these funds is from Sriki’s hacking crimes.
The SIT official noted, “We need to obtain evidence from the exchanges where the hacking occurred to confirm the hacker’s claims and establish the use of stolen funds for payments in India.”
In a voluntary statement, Sriki told the police about his involvement in several hackings, including one at the Bitfinex exchange in the British Virgin Islands. He described it as his first significant hack. According to Sriki, he made approximately 2,000 Bitcoins from the Bitfinex hack and spent it all on a luxurious lifestyle.
He explained that the price of Bitcoin ranged from $100 to $200 at the time, and he split the profits with a friend named Andy from the UK. He stated, “I managed to sell stolen Bitcoins using concealment techniques to avoid detection.”
In another case, Sriki said he voluntarily agreed to give some Bitcoins to the police. He understood that even if he didn’t cooperate, they could find the Bitcoins using forensic methods. So, he willingly accepted to hand over the Bitcoins stored in different wallets.
Several police officers involved in the Bengaluru crime branch from 2020 to 2021 are under investigation by the SIT. Four officers and a cyber expert have been arrested for misconduct. Most recently, on October 7, the SIT arrested Sridhar Pujar, a deputy superintendent who was the investigation officer when Sriki was arrested. His bail plea is pending in a special court next week.
According to Robin Khandelwal, Sriki initially claimed to have around 900 Bitcoins when they met in 2017. Khandelwal sold 130 Bitcoins given to him by Sriki between 2017 and 2020. He stated that Rs 3.48 crore from those sales went to the accounts indicated by Sriki, while Rs 1.5 crore was provided to Sriki in cash through hawala routes.
Sriki and Khandelwal were initially arrested for buying illegal drugs online with Bitcoin. This case led to the discovery of several cybercrimes linked to Sriki, including an Rs 11.5-crore fund heist from the Karnataka e-governance cell in 2019.
The handling of Sriki’s cases under the BJP government resulted in corruption allegations when the Congress was in opposition. Allegations include police officials seizing a large amount of Bitcoins found in Sriki’s wallets. When arrested in 2020, the value of one Bitcoin was about $25,000 (around Rs 20 lakh) and rose to $60,000 (around Rs 50 lakh) by April 2021. Recently, the price of Bitcoin reached $70,000.
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