04 Feb, Bengaluru: In a startling development that has sent ripples through the cryptocurrency community and law enforcement circles in India, the founders of Unocoin Technologies Pvt Ltd, a pioneering Bitcoin exchange based in Bengaluru, have applied for anticipatory bail. This move comes in the wake of escalating investigations into a high-profile Bitcoin scam that dates back to the 2020-21 period, during which the Bharatiya Janata Party (BJP) held power in Karnataka.
Sathvik V and Harish B V, the individuals behind Unocoin, have been embroiled in a complex case involving the alleged misuse of cryptocurrency for illicit activities. Their bail application follows closely on the heels of the arrest of Santhosh Kumar K S, CEO of Group Cyber ID (GCID) Technologies, and Prashanth Babu, a former police inspector and head of the Bengaluru city police technical cell, on January 25. The arrests are part of an investigation led by a Special Investigation Team (SIT) of the Karnataka Criminal Investigation Department (CID), which is delving into a scam involving the theft and laundering of Bitcoin.
The case has its origins in the arrest of international hacker Srikrishna Ramesh, alias Sriki, in November 2020, who was initially apprehended for purchasing drugs online using Bitcoin. Further investigation revealed Sriki’s involvement in multiple hacking incidents, including a significant theft from the Karnataka government’s e-governance unit and various online gambling platforms. The complexity of the scam intensified when it was discovered that 31 Bitcoins, seized by the police from Sriki’s cloud crypto wallet, had mysteriously disappeared from a police wallet intended to secure the seized assets.
Amidst these developments, Santhosh Kumar is accused of illegally accessing and transferring Bitcoin from the wallet of Robin Khandelwal, an associate and accountant of Sriki, under the direction of the police. This incident has raised serious concerns about the integrity of the investigation and the potential misuse of authority by law enforcement officials.
The SIT’s investigation has also unearthed allegations of large-scale corruption involving the police and politicians, with accusations that bribes were accepted in cryptocurrency to weaken the cases against Sriki and his associates. These revelations have prompted the Congress government in Karnataka, which assumed power in July 2023, to form the SIT with a mandate to investigate the laundering of Bitcoins and related cases thoroughly.
A Bengaluru district court recently denied interim anticipatory bail to Sathvik V and Harish B V, emphasizing the need to hear the prosecution’s objections before making any decisions. This case highlights the challenges of regulating and investigating cryptocurrency-related crimes and underscores the potential for misuse of digital assets in the shadowy realms of hacking and online fraud.
As the investigation continues, the focus remains on unraveling the full extent of the Bitcoin scam and holding those responsible to account. The outcome of this high-stakes inquiry is keenly awaited, not just for its implications for the accused and the investigators, but also for its broader impact on the cryptocurrency landscape in India.
