A Special Investigation Team (SIT) of the Karnataka Police constituted in 2023 to probe the allegations of large scale corruption by politicians and policemen by using Bitcoin Thursday arrested a former Bengaluru crime branch police officer and a private cyber expert in the probe. The SIT was formed in July 2023, two years after the arrest of international hacker Srikrishna Ramesh or Sriki during the BJP regime in 2020. The latest arrests are in connection with a new case filed by the SIT this month on charges of criminal breach of trust, mischief and destroying of evidence. SIT chief Manish Kharbikar said, “Prashanth Babu, a former police inspector of the Bengaluru police Central Crime Branch (CCB), (who is currently posted at the Bengaluru commissionerate), and a private cyber expert, Santhosh Kumar K S, who runs a private firm, have been arrested.” The police said that at the early stage of the investigation in 2020-21, a sum of around Rs 3 lakh was found to have been transferred by an associate of Sriki to a cyber expert called in to help with the investigations. The funds were allegedly transferred by a friend of Sriki (who was also his accountant) who dealt with crypto currency conversions for the hacker. Vanishing of Bitcoin seized by police Among the persons held by the SIT on Wednesday, Babu is considered to be a technical expert while the private cyber expert was one of the witnesses for the seizure of 31 Bitcoins from Sriki in January 2021. The police seizure of the 31 Bitcoins – when a Bitcoin was valued at over $50,000 – on January 8, 2021, turned out to be a fraud with the transfer to a police wallet being declared as bogus by experts later on January 31, 2021. Incidentally, Kumar was one of the persons who had provided a report to the Bengaluru police about the fraudulent seizure. In November 2021, the Bengaluru police officially claimed that Sriki deceived them into believing they had seized 31 bitcoins from his personal electronic wallet in January 2021. “On inquiry, cyber experts opined that the said account claimed by the accused as his personal account, was in fact a live wallet of an exchange and the accused did not have a private key for this. Hence, the said account was left untouched and as a result, no Bitcoins were transferred to the police wallet,” a police statement said in November 2021. Cases registered by SIT since taking over probe The CID SIT has filed two new FIRs since starting investigations into the Bitcoin scam in July 2023. In August 2023, the SIT filed an FIR against unnamed CCB police officers for alleged tampering of devices that were seized as evidences from Sriki and his associates in November 2020. The FIR, filed at the Cottonpet police station, quoted a digital forensics report dated February 20, 2023, that two pen drives seized from the accused on November 9, 2020, at the time of the first batch of arrests, had been manipulated in police custody. The report added that an Apple Macbook and a hard disk seized on November 17, 2020, and a second Macbook seized on November 19, 2020, was tampered with after the seizure. The CID has found that the electronic and computer devices were tampered with at the premises of the CCB office in Bengaluru between November 9 and December 12, 2020. In October 2023, the SIT conducted raids and searches in nine different locations, including places belonging to four police officers — Sridhar Poojar, Prashanth Babu, Chandradhar S R and Lakshmikanthaiah — and two private cyber experts K S Santhosh Kumar and Gagan Jain. All the police officers and cyber experts were called in by the CCB in 2020 to study and analyse devices seized from Sriki and his associates for evidence of hacking activities and stolen crypto currency. All the officers and experts have been questioned several times by the CID SIT in the recent months. Later, in September 2023, Poojar obtained a High Court order against precipitative action without evidence against him by the police in the tampering of evidence case. Sriki and his accountant’s arrest Sriki and his accountant Robin Khandelwal were initially arrested by the CCB in November 2020 on charges of ordering drugs on the internet using Bitcoins. Sriki is accused of transferring stolen funds to Khandelwal, who ran a Bitcoin trading service. The case involving the purchase of drugs through the darknet, which was unearthed by the crime branch in November 2020, eventually led to the cracking of several cybercrimes in Karnataka involving Sriki. One of the cases that was solved was a Rs 11.5 crore heist from the Karnataka e-governance cell in July-August 2019. The political ramification of the alleged Bitcoin scam The handling of the cases involving the hacker by the police under the BJP regime in Karnataka since the arrests in November 2020 resulted in allegations of corruption by the Congress when it was in the Opposition. The Congress has suggested that the police and politicians collected payment of bribes through cryptocurrencies from the hacker and his associates to water down the cases. The hacker himself has said in his police statements that are on record in charge sheets filed by the CCB that he was forced to handover all cryptocurrencies in his possession to the police. “I understood the case scenario that even if I do not give them the Bitcoins they can use forensic methods to find the Bitcoins after a talk with the investigating officer. So, post consultations I voluntarily accepted (sic) to give away the Bitcoins which I had kept in various wallets in different cryptocurrencies,’” reads a statement attributed to the hacker which is a part of the chargesheet in one of the cases filed against Sriki in 2021. In October 2021, Chief Minister Siddaramaiah had said on social media, “There is information about the involvement of influential politicians of Karnataka in the drugs and Bitcoin scam. It is concerning that the investigating officers are trying to close the case to help those politicians.” The CID SIT was formed by the Congress government in July 2023 shortly after coming to power in the state for “investigating cases connected to laundering of Bitcoins and other cases”.
SIT probing Karnataka Bitcoin scam arrests crime branch police officer, cyber expert
