Karnataka SIT in touch with over 30 foreign exchanges to establish money trail in alleged bitcoin scam

The SIT has identified some suspect transactions in local banks. It suspects that some bitcoins were encashed with the help of a jeweller. However, they need evidence of bitcoin transactions to verify whether these suspect transactions are linked to the alleged bitcoin scam.

The Special Investigation Team (SIT) of the Criminal Investigation Department (CID), which is probing the alleged bitcoin scam, is in touch with over 30 foreign-based bitcoin exchanges in a bid to collect evidence on the movement of cryptocurrencies allegedly moved by hacker Srikrishna Ramesh aka Sriki. 

Sriki, arrested in a darknet drugs case in 2020 by the Central Crime Branch (CCB) of Bengaluru police, turned out to be a hacker who claimed to have stolen bitcoins. He confessed to hacking the Bitfinex exchange in one of the biggest cryptocurrency heists in the world. A few officials allegedly forced Sriki to transfer the stolen bitcoins to benami accounts, which were later encashed. There have been allegations that certain politicians were among the beneficiaries of this scam, prompting Congress to set up the SIT to probe the case. 

Sources close to Sriki claim that he was forced to transfer bitcoins while he was in judicial custody and lodged in Parappana Agrahara Central prison. There were alerts online of the stolen and blacklisted bitcoins from Bitfinex being moved while he was in custody. 

The SIT probe is now trying to trace the movement of bitcoins to establish a money trail.

An officer with the SIT said, “We are in touch with 30-35 foreign-based bitcoin exchanges, including Bitfinex, seeking details of the movement of bitcoins during the period we are interested in and from the wallets we are interested in. As these transactions took place in 2020 and 2021, it is a challenging task for the team to track the money trail.” The SIT is also in touch with Interpol, according to the officer. 

The SIT has identified some suspect transactions in local banks. It suspects that some bitcoins were encashed with the help of a jeweller. However, they need evidence of bitcoin transactions to verify whether these suspect transactions are linked to the alleged bitcoin scam.

Sources said that while a few beneficiaries may have encashed bitcoins locally, many have used professional money laundering options to direct these bitcoins to offshore accounts, which is another challenge for the sleuths.