Indian Police Officer Arrested for Stealing $216,000 in Bitcoin from Crypto Scam Investigation

Indian Police Officer Arrested for Stealing $216,000 in Bitcoin from Crypto Scam Investigation

An Indian police officer has been arrested for stealing Bitcoin worth INR 1.8 crores (approximately $216,000) linked to a crypto scam investigation. Chandrahar SR, a former police inspector with the Central Crime Branch (CCB), illegally accessed the Bitcoin wallet of a hacker, which was part of the evidence in an ongoing investigation.

The scam under investigation dates back to 2017 and was orchestrated by hacker Srikrishna Ramesh and his associate Robin Khandelwal. The duo hacked into cryptocurrency exchanges like Bitfinex and Unocoin, amassing around INR 5.5 crores ($660,000) through their operations. Ramesh attempted to launder the stolen funds using Bitcoin with the help of Khandelwal but was eventually arrested in 2020.

Initially, the Crime Branch reported that the Bitcoins could not be recovered, leading to an investigation by a Special Investigation Team (SIT). The SIT accused Ramesh of manipulating the Bitcoin core application to mislead investigators. However, it has now emerged that Chandrahar, one of the crime branch officers involved in the investigation, accessed the hacker’s wallet and stole the Bitcoin. The SIT alleges that Chandrahar detained Khandelwal and coerced him into transferring the funds, subsequently destroying all evidence related to the transactions.

According to the FIR filed by the SIT, Chandrahar, along with two other CCB officers, conspired with Santosh Kumar, a private cyber expert, to access the wallet. They accessed the Bitcoin wallet at Kumar’s office in Bengaluru between December 30, 2020, and January 6, 2021. Chandrahar, Kumar, and the other officers have been charged with illegal confinement, breach of trust by a public servant, and destruction of evidence.

Chandrahar had been evading authorities since being summoned for questioning but was eventually arrested by the SIT at his residence in North Bengaluru. In addition to Chandrahar, two other unnamed police officers have also been arrested in connection with the Bitcoin scam investigation.

India has been witnessing a rise in scams and frauds, prompting regulators to tighten their oversight of the nation’s crypto sector. This incident underscores the ongoing challenges and complexities in regulating and securing the rapidly evolving cryptocurrency landscape.

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