Karnataka Bitcoin scam: SIT to source high-end tool to track trail of transactions

The Special Investigation Team (SIT) of the Criminal Investigation Department (CID), which was constituted to probe the bitcoin scam that unfolded during the previous BJP rule, will source a high-end tool to unearth the trail of bitcoins moved by the accused Srikrishna Ramesh aka Sriki.

The Special Investigation Team (SIT) of the Criminal Investigation Department (CID), which was constituted to probe the bitcoin scam that unfolded during the previous BJP rule, will source a high-end tool to unearth the trail of bitcoins moved by the accused Srikrishna Ramesh aka Sriki.

A source told The Hindu that the SIT is sourcing the tool specially designed for tracking the movement of cryptocurrencies and if put to use, this will be first of its kind employed for any investigation in the State. The decision was taken to purchase the tool as SIT is grappling to find evidence for transactions of bitcoins. It was alleged that Sriki was forced to move the coins, which he allegedly stole from cryptocurrency exchange Bitfinex, by police officials who were investigating him in a drug case and certain influential personalities in the political circles. 

Sriki was arrested by Central Crime Branch (CCB) in 2020 and he was kept inside a quarantine cell. The sources say that he had moved several coins from the cell using a laptop smuggled inside Parappana Agrahara. While SIT is in the know of these transactions, the team wants to find out where these coins have been moved and the networks used for the transactions. The SIT believes that this tool may come in handy in the process of investigation.

A source said these coins were moved using the Darknet network, which offers anonymity to the user. Hackers who trade stolen Bitcoins also mask the Virtual Private Network. The coins were moved from Sriki’s wallet.

On the other hand, the SIT is likely to quiz three prison officials who allegedly facilitated Sriki to carry out the transactions.

Samath Bhat, a cryptocurrency security expert, said there are many tools to trace the movement of coins, but it again depends on how effective these tools are and which network the accused had used to conduct transactions. “It is extremely difficult, but possible to unearth the trail in Darknet. Darknet is the most preferred conduit to move the coins secretly.”

Mr. Bhat further said: “Tools are being made everyday as we speak. And these tools, if employed before transactions, will help monitor the transactions.” He opined that the bitcoin scamsters use various networks for transactions and it is difficult for a single agency to probe. A multi-agency probe will help unearth what has happened, he said.