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What is the Bitcoin Scam that has shocked Karnataka Govt?

A crypto scam has jolted Karnataka government. The scam surfaced in November 2020 when the Central Crime Branch (CCB) allegedly seized 31 bitcoins. However, as the investigation proceeded accused misled CCB into believing that the coins had been transferred.

The scam has opened by a pandora’s where allegations are flying left and right like the involvement of members from the state ruling party BJP. So what is this scam all about? Let’s decode.

The Bitcoin Scam

The prime suspect, Srikrishna Ramesh, is accused of cyber fraud, drug peddling, and cryptocurrency theft. Srikrishna, going by the alias ‘Sriki’, is a hacker and is being currently investigated by three different agencies – the Enforcement Directorate (ED), Cyber Crimes department of Criminal Investigation Department (CID), and the Criminal Branch of Bangalore. With, accusations of having hacked the Karnataka government’s e-Procurement site two years back. With siphoning off just over 11.5 crore INR.

Ramesh’s interest in computers and programming began at the tender age of 8-9 years. It was reported that he used to hack school websites to change his attendance and marks. He took his shape as a Black Hat Hacker when he was just in grade 8. As his age went by, he became involved in some critical crimes. For example, an Australian hacker Shane D and he once allegedly hacked PayPal’s accounts transaction, all while he was still in college.

Ramesh also reportedly confessed to hacking and transferring a rough over 5000 bitcoins to wallet over different parties.

In November 2020, the Central Crime Branch (CCB) seized just about 31 bitcoins amounting to 9 crores from the Bengaluru-operating hacker. Allegedly, the seized bitcoins are no longer in possession with the CCB, which hints at the corruption within the police ranks. Sriki is also accused of drug trading through the dark web.

The cryptocurrency scam was turned into a political game when Congress demanded an independent investigation by the Supreme Court. The opposition is also holding the Bengaluru police responsible for misappropriating bitcoins that were seized.

The Further Story

In November, the CCB based on a tip-off; took remand of a man named Suneesh Hegde, who was obtaining hydro marijuana through a chain of dealers on the dark web. In his interrogation, Hegde put the blame on Ramesh, saying he was the one helping him to get the drugs.

When the case resurfaced, Congress accused Chief Minister of Karnataka, M Bommai, of looking over the matter when the Karnataka Home Minister should be more responsible.

BJP’s side of the Coin

“Our government is open on this issue. We are the ones who exposed the case. It is our government that 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

In his defence, Bommai said that they would act against all the involved parties in the scam. But he did raise questions as well. When Congress was in power in 2016 and 2018, why did they not take any action; what could be their reason? He asked.

Government’s Stance on Crypto

The Reserve Bank of India and the government have kept silent for some time. But the government has finally broken silence. Even though the sector is rising exponentially in India, the authorities are concerned about the digital asset class. Adding to this, they say that cryptocurrencies also pose a threat to the country’s financial stability.

Back in 2018, RBI declared that the banks will not be taking part in any transactions regarding cryptocurrencies. After that, however, the Supreme Court quashed the complete ban on cryptocurrencies. Since then, RBI has set up an internal panel to construct a sustainable model of the central bank’s digital currency; this announcement is expected in the coming months.

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