Police begin fresh probe in Bitcoin scam as pressure mounts | Latest News India

More than 11 months after arresting Bengaluru-based hacker Srikrishna Ramesh alias Sriki, city police have launched a fresh probe into theft of bitcoins by him by hacking cryptocurrency exchange Bitfinex in 2016. The fresh investigation comes after allegations have been made about a scam involving the hacker and cryptocurrency.

Srikrishna was caught on November 18, 2020, after police arrested some drug dealers to whom he had allegedly sold drugs procured from the dark web. Srikrishna graduated in computer science from a college in Amsterdam in the Netherlands in 2017 and has good knowledge about computers and the internet.

During his interrogation, police found that Srikrishna used encrypted data and demand payment from owners for the site to be unlocked by attacking the sites online. He had hacked Karnataka government portals as well. While in custody, he also confessed to having hacked into some bitcoin exchanges. One of them was Bitfinex. Around 120,000 bitcoins, which was about $72 million at the time, were stolen from Bitfinex in August 2016.

“Early in the morning on August 2, 2016, hackers breached security systems of our exchange. As a result, 2072 unauthorized transactions were broadcast on the bitcoin network, involving 119,755 bitcoins in aggregate. We have learned valuable lessons from this painful episode, addressing the security issues and vulnerabilities associated with the theft,” read a statement issued by Bitfinex in August 2020.

The company had also put a reward of 5% of total recovery for anyone who provides information about the hackers. This hacking was said to be one of the biggest breaches of security and theft involving cryptocurrency, and international enforcement agencies began an investigation into the case as well.


Incidentally, in December 2020, Srikrishna had confessed to his role in the Bitfinex hacking to police during the interrogation. According to a statement he gave to police, which was later reproduced in the charge sheet, he confessed that he was part of a hacking group that broke into Bitfinex.

According to a senior officer, some officers in the department especially officers of the Central Crime Branch (CCB) had come under scanner after the matter was raised by the central enforcement agencies. “Even though the hack into Bitfinex was being probed by international agencies, the CCB, which had information about this involvement in the Bitfinex hacking as early as November 2020 did not share this information with the investigating agencies,” said the officer, who didn’t want to be named.

The officer said even though Bengaluru police had announced that they had seized 9 crore worth of bitcoins from the Srikrishna, the charge sheet or the evidence submitted before the court doesn’t talk about the bitcoins. “The CCB had claimed that they had created a new bitcoin account in the police department’s name and the 9 crore worth of bitcoins were transferred to this account to be presented as evidence,” said the officer.

Although the case had gone under the radar, an Enforcement Directorate (ED) probe into the 11-month-old case had snowballed into a political controversy with the opposition Congress accusing the ruling BJP of a cover-up in the case. Congress leader Siddaramaiah told the media that two influential politicians were involved and there was an attempt to cover up their role in the case.

A senior officer involved in the investigation denied the scandal and said allegations were baseless. “All the bitcoins that were stolen from the exchange in 2016 were blacklisted, which means they can’t be converted to currency. The exchange itself has claimed that, so there is no chance of any scam. If they are any other allegations, ED is looking at it,” said the officer of Bengaluru police.

The officer, however, didn’t comment on the investigation into the transaction of bitcoins by Srikrishna.

After being released on bail in January 2021, Srikrishna was arrested on charges of consumption of narcotics on Monday. Even though he was arrested by Jeevan Bhima Nagar police, he was interrogated by officials of the CCB.