Bitcoin scam: SIT invokes KCOCA against hackers, treat it as organised crime

The bitcoin scam had surfaced during the previous BJP regime in 2021, and the Congress then in the opposition, had accused the government of trying to cover up the scandal as it involved big names.

BySouth First Desk

Published May 26, 2024 | 1:20 PMUpdatedMay 26, 2024 | 1:20 PM

Srikrishna Ramesh alias Sriki

The Special Investigation Team probing the bitcoin scam has booked hackers Srikrishna alias Sriki and Robin Khandelwal under the Karnataka Control of Organised Crime Act (KCOCA).

Sriki was arrested by the Tumakuru police after his role was found in stealing 62 bitcoins worth ₹32 crore on 8 May. ₹32 crore worth bitcoin transactions took place in Tumakuru.

In a statement, the Criminal Investigation Team said that since Sriki and Khandelwal were involved in many such cases, it has been decided that they should be booked under section-3 of the KCOCA.

The bitcoin scam had surfaced during the previous BJP regime in 2021, and the Congress then in the opposition had accused the government of trying to cover up the scandal as it involved big names.

In July 2023, after the Congress assumed power in Karnataka, an SIT was constituted to probe the case.

Also Read: Bitcoin scam: SIT arrests prime accused Srikrishna Ramesh alias Sriki again in related case

Srikrishna alias Sriki, the cybercrime expert

Srikrishna Ramesh alias Sriki, a hacker was aged a mere 25 when Bengaluru’s CCB police arrested him and his associates in a narcotics case in November 2020.

Sriki was accused of procuring drugs using Bitcoin — the world’s best-known cryptocurrency — via the dark web, which noted cybersecurity firm Kaspersky describes as “sites that are not indexed [by search engines] and only accessible via specialised web browsers”.

When Sriki was caught in end-2020 for peddling these narcotics to high-profile clients, it was not his first run-in with the police.

Srikrishna first appeared on the police radar in 2015, when he was arrested in connection with a bank account hacking case. However, he was granted bail quickly.

The police said the fact that he was not monitored after this case emboldened him, and he ended up racking up multiple cybercrimes and drug peddling charges over the years.

In February 2018, he was named as one of the accused in a pub brawl case involving Congress leader NA Haris’ son Mohammed Nalapad Haris. Srikrishna was charged with attempted murder as one of the aides of Nalapad but went absconding.

While the rest of the accused went to jail, Srikrishna was at large till the time he got anticipatory bail. The police could not trace him since he didn’t use a mobile phone.

When Srikrishna was arrested again in November 2020 in the narcotics case, it opened up a Pandora’s box of murky cybercrimes. Police sources said he remained distant from his family. He did not have any intimate relationships. His focus was on making money and consuming drugs.

He used to be hired by influential people for his expertise in cybercrime. Unfortunately for them, he created a detailed digital track of every exchange and interaction with them.

If he went down, he would take everyone down with him, recalled a senior police officer who interrogated Srikrishna in a cybercrime case.

Also Read: Karnataka HC denies anticipatory bail to accused police officials in Bitcoin scam

Hacking a government portal

The prime suspect Sriki was accused of hacking the state government’s e-procurement site and siphoning off over ₹11.5 crore. There were also charges of cryptocurrency theft, drug peddling and cyber fraud relating to the case.

On 17 December, 2019, a financial consultant of the e-Procurement Cell, Shylaja SK, lodged a complaint with the CID’s cybercrime police station in Bengaluru.

According to her complaint, she came across unauthorised fund transfers to the tune of ₹7.37 crore while verifying Earnest Money Deposit (EMD) refunds.

Investigations revealed that ₹1.05 crore was illegally transferred to bank accounts in Uttar Pradesh and Maharashtra. In all, a total of ₹11.55 crore had been siphoned off from the online portal of the Centre for e-Governance under the Karnataka government.

Based on her complaint, an FIR was registered and the CID sleuths initiated an investigation.

However, it was only in November 2020, when Srikrishna was arrested in the aforementioned narcotics case, that the police learnt that he was the mastermind behind the alleged hack.

Interrogating him in the narcotics case, the CCB claimed to have recovered 31 Bitcoin — valued at ₹9 crore back then — from Srikrishna. This claim was later retracted.

Also Read: SIT arrest police inspector, CEO of IT firm in B’luru for destruction of evidence in Bitcoin scam

Cases against Sriki

Sriki’s legal counsel, senior advocate Dayanand Hiremath, had told South First that there are at least nine cases registered against him, and it is less likely that a new FIR would be registered as most of these cases have been investigated and even charge sheets have been filed. They are in various stages of progress.

“One case for a vandalising and assault at a star hotel, two other cases including the narcotics case registered by the Central Crime Branch police, and six other FIRs — including the ones at the Kempegowda Nagar and Cottonpet Police Stations — were registered against him and investigated,” he noted.

“He is very smart. He looks up his court dates and appears before the judge without advocates. According to me, he thinks 10 times faster and is ahead of a normal person,” Hiremath told South First.

Srikrishna was found to be involved in cybercrimes like ransomware attacks, hacking into Bitcoin exchanges, looting cryptocurrency, money laundering, and cyber fraud.

Involvement of officials

The Karnataka High Court had earlier, refused to grant anticipatory bail to a police inspector and Deputy Superintendent of Police, who are among the accused in the Bitcoin scam case.

The bail petitions of inspector Chandradhara SR and Deputy Superintendent of Police Shridhar K Pujar, who are accused number three and five respectively in the case, were earlier rejected by a sessions court.

Justice Rajendra Badamikar, delivering the verdict, highlighted concerns about potential manipulation of records and destruction of evidence, given the positions held by the petitioners.

According to an FIR by the SIT, the prime accused in the case is Santhosh Kumar KS, CEO of GCID Technologies, an IT firm situated in HSR Layout followed by the other four accused police inspectors — Lakshmikanthaiah, Chandradhara, Prashanth Babu DM, and Shridhar K Pujar.

While Lakshmikanthaiah, Chandradhar and Shridhar K Pujar were the then police inspectors attached with the CCB, Prashanth Babu DM was serving as a police inspector with the Technical Support Centre in Adugodi. Sridhar K Pujar is a DySP rank officer at present, the FIR stated.

It was police inspector Prashanth Babu who had roped in an external private agency — GCID Technologies and its CEO Santhosh Kumar — directly into the Bitcoin investigation and even introduced the CEO to the other three police inspectors of the CCB asserting that he could be of immense help, SIT sources had told South First.

The SIT officials said that vital evidence was tampered with at the CCB’s office in Chamarajpete and other places between 9 November, 2020, and 16 December, 2020, by the accused officers as part of a criminal conspiracy.

SIT sources had told South First that the then-CCB investigating officers had deleted technical information of some transactions, and are even said to have planted additional files as evidence to dilute the case and to protect the accused.

It may be noted that each Bitcoin was trading at around ₹13-14 lakh towards the end of November in 2020. It reached its peak — around ₹47.88 lakh apiece — in November of the next year, before crashing. On 7 May, 2024, its value was over 53 lakh.

Bitcoin has for quite some time been the favoured mode of payment for hackers and scammers because of its decentralised and anonymous nature, which makes it hard to track.

It is also the preferred currency for dealers of contraband in the aforementioned dark web.

(Edited by Shauqueen Mizaj, with inputs from PTI)