Senior IPS officer appears before SIT probing Karnataka Bitcoin case

Sandeep Patil, the IPS officer of the rank of inspector general of police and the former Bengaluru joint commissioner of police (crime), spoke to SIT officers at the CID headquarters on Wednesday afternoon, sources familiar with the probe said.

The development follows the SIT arresting police inspector Prashant Babu, who headed the technical support cell of the Bengaluru Crime Branch (CCB) police, and K S Santhosh Kumar, a private cyber expert from the Group Cyber ID company, in a new case related to the Bitcoin scam registered on January 24.

The SIT has also named three former Crime Branch police inspectors Sridhar Poojar, S R Chandradhar and Lakshmikanthaiah – the original investigators of the cases against Sriki in an FIR that was registered in the CID cybercrime police station on January 24.

Hacker Sriki, his associate and accountant Robin Khandelwal have provided confessional statements under Section 164 of the CrPC before magistrate courts in recent weeks.

The SIT has alleged large-scale irregularities in the investigations against Sriki after his arrest, which was announced on November 18, 2020, on social media by Patil, who was the joint commissioner of police (crime) then, the seniormost supervising authority in the case at the time.

The Crime Branch police claim to have attempted to seize 31 Bitcoin found in the possession of the hacker to a police wallet on January 8, 2021, but later on January 22, 2021, the police found that the 31 Bitcoin had not been actually seized and that they were allegedly tricked by the hacker.

The SIT probe has revealed that many of the steps taken in the investigations in 2020 for gathering evidence against the hacker were with Patil’s knowledge.

A laptop provides vital clues

A key breakthrough in the CID SIT probe of the Bitcoin scam in Karnataka emerged following the recovery of a laptop in October 2023 that was allegedly given by police officers to hacker Sriki when he was in police custody in 2020.

The laptop provided the SIT with digital evidence to show that police officers illegally accessed Sriki’s cryptocurrency wallets on a cloud server, sources familiar with the probe said.

Sriki and Khandelwal were initially arrested on charges of ordering drugs on the darknet using Bitcoin. The case eventually led to the cracking of several cybercrimes in Karnataka involving Sriki, including a Rs 11.5 crore heist from the Karnataka e-governance cell in July-August 2019.

The handling of the cases involving Sriki under the BJP regime in Karnataka resulted in allegations of corruption being levelled by the Congress when it was in Opposition between 2020-2023. The Congress government constituted the CID SIT on June 30, 2023, soon after it came to power in May.

Sriki himself has said in police statements that are on record in chargesheets filed by the CCB that he was forced to hand over all the cryptocurrency 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 Sriki, which is a part of the chargesheet in one of the cases filed against the hacker in 2021.

Cyber expert Kumar, who was roped in by the police to assist the investigation, is alleged to have accessed Khandelwal’s crypto wallet and transferred Bitcoins valued at Rs 1.83 lakh to his own crypto wallet.

The investigations have also found several procedural lapses in the CCB probe against the hacker and his associates – including illegal detention; no documentation as evidence of the logins, passwords and data for the computer usage by the accused; and the provision of a laptop worth Rs 60,000 by the police to the hacker Sriki.