Karnataka Bitcoin scam: SIT gets sanction to probe corruption charges against four cops

The SIT arrested the four police officers – Sridhar Pujar, currently a deputy superintendent of police, and police inspectors Prashanth Babu, Chandradhar S R and Lakshmikanthaiah – in 2024.

While the SIT has gathered evidence of alleged police tampering with devices seized from Sriki and his associate, Robin Khandelwal, by using the services of private cyber experts, it is also looking at the corruption involved in the case, police sources said.

“There has been a transfer of Bitcoin from one of the accused to a technical expert. There is also the question of the claim of disappearance of cryptocurrency held by the hacker after he was arrested and taken to police custody (in 2020). These are being investigated as acts of corruption by the police officials,” a police source said.

The SIT will require additional sanctions under Section 19 of the Prevention of Corruption Act to file a chargesheet against the officers as well as under the Karnataka Police Act and Section 197 of the Criminal Procedure Code when investigations are completed, police sources said.

The SIT probe has found that a cyber expert roped into assist investigations by the Bengaluru Central Crime Branch (CCB) police into the illegal activities of Sriki in 2020 illegally accessed the crypto wallet of an accountant of the hacker and transferred Bitcoin valued at Rs 1.83 lakh to his own crypto wallet.

The SIT named five people – cyber expert K S Santhosh Kumar who runs a private firm called Group Cyber ID Technology Pvt Ltd in Bengaluru and former CCB officers Poojar, Babu, Chandradhar and Lakshmikanthaiah – in the FIR alleging illegal confinement, breach of trust by a public servant and destruction of evidence filed in the Cyber Crime police station of the CID on January 24, 2024.

The investigations in the case have revealed dozens of procedural lapses by the police, including illegal detention, lack of documentation of the logins, passwords and data for computer usage by the accused, and even the provision of a laptop worth Rs 60,000 by the police to Sriki to facilitate hacking.

In statements to the police that are documented in earlier chargesheets filed by the CCB, Sriki claimed to have had 400 to 500 Bitcoins in his possession when he was arrested in 2020. The CCB police never recovered any of the Bitcoin allegedly acquired through illegal hacking by the hacker.

On January 5, 2021, on the instructions of Babu, cyber expert Kumar is alleged to have gained access to crypto wallets, email accounts, and bank accounts of Sriki and Khandelwal and changed the logins and passwords in the absence of witnesses or court orders, the SIT has alleged.

The SIT has further stated in its FIR that Babu provided a laptop worth Rs 60,000 to Sriki, with which the hacker was allegedly allowed to access his Amazon Web Server account on the cloud, but no data accessed was collected for evidence by the officers.

The police officers who were a part of the Central Crime Branch unit of the Bengaluru police in the 2020-21 period are also accused in a separate FIR from September 2023 of tampering with evidence in the form of two laptops that were seized from Sriki after his arrest in November 2020 by a CCB team led by Pujar.

The SIT has yet to seek sanction under the Prevention of Corruption Act to probe the alleged corruption in the 2023 case.

The SIT referred to voluntary statements of Sriki and two technical experts who were witnesses to suggest that CCB police officers facilitated the illegal accessing of crypto wallets containing crypto currency to the tune of Rs 850 crore belonging to the hacker.

Citing a Centre for Development of Advanced Computing (CDAC) forensic report for the laptops seized from the hacker and statements of witnesses, the SIT has alleged that as many as 4,000 Bitcoin valued at Rs 850 crore in 2020 was probably accessed illegally by police officers after Sriki’s arrest.

The CDAC report dated January 23, 2024, has stated that one of the laptops seized from Sriki on November 17, 2020, was used to access crypto wallets at cryptocurrency websites and for accessing online gaming platforms while it was in police custody.

The CID SIT was constituted by the Congress government in June 2023 to probe the alleged Bitcoin scam from the tenure of the BJP government (2019-2023), where cryptocurrency worth crores, allegedly stolen by the hacker from international exchanges and gaming sites, was siphoned away after the hacker’s arrest in 2020.

Sriki is accused of multiple hacking crimes in India, including the extortion of gaming sites like PokerBaazi in 2020, the theft of Rs 11.5 crore from the Karnataka e-procurement portal in 2019, and the theft of 60.6 Bitcoin worth ₹ 1.64 crore in 2017 from the Unocoin cryptocurrency exchange in Karnataka.

Sriki and Khandelwal were initially arrested by the Bengaluru Crime Branch in November 2020 on charges of purchasing drugs on the dark web with Bitcoin. The case led to the cracking of several cybercrimes in Karnataka.