Karnataka Bitcoin scam: Arrested police inspector, cyber expert sent to CID custody

Bengaluru: A Bengaluru court on Thursday sent an arrested police inspector and a cyber expert to CID custody, till January 31, in connection with the Bitcoin scam.

The Special Investigation Team of the CID had produced accused police inspector Prashanth Babu D.M. attached to the Technical Support Centre and CEO of GCID Technologies Pvt Ltd Santhosh Kumar K.S. before the First Additional Chief Metropolitan Magistrate court following their arrest.

The SIT formed to probe the Bitcoin scam that came to light during the previous BJP government made the arrests on Wednesday.

The police have registered a FIR under IPC Sections 343, 344, 409, 426, 34, 36, 37, 201 and 204.

The SIT has also filed a FIR against Lakshmikanthaiah, former inspector, Chandradhar and Shridhar K Pujar, police Inspectors attached to the CCB wing in Bengaluru. The police said a probe is still on against them and based on the evidence the rest of the culprits will be arrested soon. So far they have been questioned.

The development is likely to take a political twist ahead of the Lok Sabha elections, as the involvement of prominent politicians of the state is suspected in the scam. These are the first arrests made after the formation of the SIT. Police sources stated that the accused were arrested on charges of destroying the evidence regarding the scam to ensure that their involvement is not tracked. The SIT team had summoned the alleged kingpin Sriki for questioning.

The SIT under the CID was formed in September 2023 by the Congress government. Home Minister G Parameshwara had then stated, "We had discussed about lakhs of crores of rupees being siphoned off during the previous BJP government. Now, we have ordered a re-investigation. The SIT is being formed under the CID. The scandal involves technical, interstate and international matters."

Sources had then said that the bitcoin scandal had taken place after the CCB police arrested the alleged international hacker Srikrishna a.k.a Sriki in Bengaluru in 2020 on the charge of selling drugs. It was alleged that using the accused hacker, the ruling BJP leaders had minted a huge amount of money by "allowing" him to commit the scandal in custody in 2020. The probe revealed that the accused had siphoned off Rs 11 crore by hacking into online gaming companies and government web portals. He had allegedly converted the money into bitcoins and indulged in drug peddling in Bengaluru.

As the matter came to light, Congress Karnataka in-charge Randeep Singh Surjewala had in a series of tweets last year attacked the BJP central leadership as well as former Chief Minister Basavaraj Bommai over the bitcoin scandal. “What is the role and responsibility of Basavaraj Bommai (who was the home minister at that time) and others in the state government? Surjewala had questioned, causing major embarrassment to the BJP. "The layers of the Bitcoin scam are finally being unearthed. Let India's Home Minister and Bommai answer. Release details of the investigation and suspects including political people,” he had stated. How many Bitcoins were stolen and of what value? Who in Karnataka is involved? Were the stolen Bitcoins transferred from the wallet of the arranged hacker Srikrishna? Surjewala questioned.

"Whether the "Whale Alerts" reflecting the transfer of the 14,682 stolen Bitfinex Bitcoins valued at Rs 5,240 crores on the two dates December 1, 2020 and 14 April, 2021 when Srikrishna was in custody, has any correlation?" Surjewala said.

He further asked, "Why was Interpol not informed? Why did the BJP government wait for over 5 months uptil 24th April 2021 to write to Interpol and that also after the release of Srikrishna on 17th April 2021." He also questioned, "Why did the National Investigation Agency, Serious Fraud Investigation Office and the Enforcement Directorate not informed by the Karnataka BJP government?

Minister for RDPR, IT and BT Priyanka Kharge then stated, "I believe the FBI is in Delhi to investigate the billion dollar Bitcoins scam. Like I said before, if the state investigates the matter, a lot of the BJP's skeletons will tumble out of the layers of the Bitcoin scam."

Bommai had later challenged Surjewala to submit any information regarding the scandal. "From my side, I have given a reply on the issue in the Legislative Assembly itself, if he (Randeep Surjewala) has any information on the issue let him submit it. Tweeting is meaningless," he had maintained.