Explained: What Is The Bitcoin Scam That Has Rocked Karnataka?

We explain here the Bitcoin scam that has rocked the Karnataka BJP government. The political outrage is over a 25-year-old hacker, Srikrishna, who has everyone swirling around his finger with cybercrimes and cryptocurrencies.

Srikrishna Ramesh who goes by the alias Sriki has Chief Minster Basavaraj Bommai’s government in quite the conundrum over an alleged multi-crore bitcoin scam in Karnataka.

The BJP government in Karnataka has swept this matter under the rug claiming it to be a “non-issue” whilst the Congress is throwing around allegations at the Bommai government of covering up the scam which could implicate BJP politicians and high-ranking police officials, reported The Quint.

During a meeting with the Prime Minister Narendra Modi that Bommai scheduled, the scam issue was brought up for consideration.

What is the Karnataka Bitcoin Scam?

Srikrishna Ramesh, whom the crime revolves around stands accused of cyber fraud, drug peddling and cryptocurrency theft. Adding to his list of crimes is hacking the government’s e-procurement site and siphoning over Rs 11.5 crore in 2019.

November 2020 had the Central Crime Branch (CCB) seizing 31 Bitcoins worth Rs 9 crore from the Bengaluru-based hacker. What is astonishing is that these bitcoins are no longer in the possession of the CCB leading to accusations of corruption among the police ranks. Ramesh meanwhile also stands accused of drug trading via the dark web.

The cryptocurrency row has now turned into a game of political blame in Karnataka and this has also lead the opposition party to demand an independent investigation under the supervision of the Supreme Court monitored Special Investigation Team (SIT).

Who is Srikrishna Ramesh?  

Sriki is a 25-year-old hacker under investigation by three different probe agencies – the Enforcement Directorate (ED), Cyber Crimes Wing of the Criminal Investigation Department (CID), and Central Crime Branch of Bengaluru Police.

His oldest case dates back to 2018 resulting in him reportedly being questioned by different probe agencies.

In this hack, the accused had planned to transfer a total of Rs 18 crore to one account and Rs 28 crore to the other” he said in a “voluntary statement” to the police.

“I initiated the second transfer of Rs 28 crore while sitting in the Himalayas. This transaction was presumably refunded because the government apparently got to know about the dubious nature of the transaction,” Ramesh’s unverified statement read.

Dealing in Hydro Marijuana on the Dark Web

Central Crime Branch arrested a man named Suneesh Hegde who was trying to claim hydro marijuana via the dark web in November 2020 based off on a tip.

Hegde admitted that Ramesh has been the one who was aiding him in the procurement of drugs under interrogation. 17 November 2020 saw the arrest of Srikrishna Ramesh.

Sriki was discovered to be involved nose deep in a series of online crimes during his interrogation.

Where are the Missing Bitcoins

Reports claim that Ramesh confessed to hacking and illegally transferring over 5000 bitcoins to various wallets of clients whilst each volume of bitcoin was estimated to be valued around $65,000.

Central Crime Branch initially announced that they had successfully managed to recover 31 bitcoins estimated to be worth well over Rs 9 crore. However they later backtracked on this claim alleging that the accused had misled the agency into thinking he had transferred the coins.

The Congress has accused the Bengaluru police of misappropriating bitcoins that were seized during the investigation.

Why is Congress accusing BJP?

The Congress has accused CM Bommai of turning a blind eye towards the issue even as he was Karnataka Home Minister when the case initially appeared.

“Instead of conducting a fair investigation, the state government appeared to be preoccupied with covering it up,” the Congress party has alleged.

What has been the BJP’s Response?

Chief Minister Bommai on 14 November said that his government will act against all those involved in the scam. However, why did the Congress, which was in power in 2016 and 2018, not take any action, he asked.

“Our government is open on this issue. We are the ones who exposed the case. It is our government which recommended the ED and the CBI to probe the case. ED is already conducting the probe and the CBI has taken it to Interpol as well. All the necessary information has been provided to these agencies,” CM Bommai said.

“If those involved are found to have perpetrated any fraud on the interests of the country, state or any individuals, we will act mercilessly against them,” he reiterated.