Indian Officer Arrested for Misappropriating $216K in Bitcoin from Scam Probe

An Indian police officer has been apprehended for misappropriating INR 1.8 crores (approximately $216,000) in Bitcoin connected to a cryptocurrency scam investigation.

Chandrahar SR, a former inspector with the Central Crime Branch (CCB), reportedly accessed the Bitcoin wallet of hacker Srikrishna Ramesh, which was part of an ongoing probe. The crypto scam in question dates back to 2017 and involved hacking cryptocurrency exchanges, including Bitfinex and Unocoin, resulting in illicit gains of approximately INR 5.5 crore ($660,000).

Ramesh, along with his associate Robin Khandelwal, attempted to launder the stolen funds through Bitcoin but was apprehended in 2020. Initially, the Crime Branch reported the Bitcoins as unrecoverable, blaming Ramesh for manipulating the “Bitcoin core application” to mislead the investigation.

The Special Investigation Team (SIT) discovered that Chandrahar allegedly coerced Khandelwal to transfer the funds while in custody and subsequently destroyed all evidence of the transactions. The FIR filed by the SIT indicates Chandrahar, along with two other CCB officers and a private cyber expert, Santosh Kumar, accessed the Bitcoin wallet at Kumar’s Bengaluru office between December 30, 2020, and January 6, 2021.

Charges against the accused include illegal confinement, breach of trust by a public servant, and destruction of evidence. Chandrahar, who had been evading law enforcement, was arrested from his residence in North Bengaluru. Two additional unnamed police officers have also been detained in connection with the Bitcoin scam.

India has experienced a surge in scams and frauds, prompting regulatory authorities to enhance their oversight of the nation’s cryptocurrency sector.

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