On November 4, 2020, Bengaluru’s Central Crime Branch police arrested 26-year-old Srikrishna Ramesh alias Sriki under the Narcotic Drugs & Psychotropic Substances (NDPS) Act in a drug-related case. Sriki was accused of procuring drugs using bitcoins via darknet and peddling it to his high-profile clients. The arrest led to to the uncovering of a series of crimes as the police found that he was involved in several other crimes, including the hacking of Karnataka government's eProcurement site in 2019.
Who is Srikrishna Ramesh?
A resident of Jayanagar in Bengaluru, Sriki reportedly developed an interest in computers and its languages from his school days and had also hacked his school website. He has informed the police that he had twice hacked Bitfinex exchange during his stay in Netherlands and claimed to be the first person to do so.
"Bitfinex was my first big Bitcoin exchange hack. The exchange was hacked twice, and I was the first person to do so. The second instance was a simple spear-phishing attack which led to two Israeli hackers working for the army getting access to the computers of one of the employees, which gave them access to the AWS cloud account," Sriki said in his statement to the police.
Explaining how he managed to hack the bitcoin exchange, he said, "I exploited a bug in the data centre which gave me KVM (Kernel-based virtual machine) access to the server. I rebooted the server into GRUB mode, reset the root password, logged in, and reset the withdrawal server passwords and routed the money via bitcoin to my bitcoin address." He said that he made a profit of around 20008 BTC (bitcoin).
He said, "I did not save anything. I spent around Rs 1 to Rs 3 lakh a day on alcohol and hotel bills on average. The price of bitcoin during the time of this hack was around USD 100 or USD 200, which I shared with my friend Andy from the UK." Sriki also informed that he had hacked into the Karnataka government's eProcurement site in 2019.
"We hacked this site in 2019 and made three separate transfers. Two of the accounts were given to me by Hemanth Mudappa for a total of Rs 18 crore in one account and Rs 28 crore in the other. Hemanth claimed he collected Rs 2 crore from an entity called Ayub, whom I do not know. However, the CID claims that Rs 11 crore was collected by Hemanth Mudappa," he said.
"I initiated the second transfer of Rs 28 crores while sitting in the Himalayas. This transaction was presumably refunded because the government apparently got to know about the dubious nature of the transaction. I did not earn any profit from this; however, I did enjoy the proceeds of the crime by living in 5-star hotels and enjoying a luxurious lifestyle from the proceeds of the same," he added.
Opposition targets BJP govt:
The Congress has alleged a multi-crore Bitcoin scam and its cover-up by the BJP government and demanded that an independent investigation be conducted into the matter by a Supreme Court-monitored SIT.
Addressing a press conference, Congress general secretary and chief spokesperson Randeep Singh Surjewala posed a set of six questions to the prime minister and asked what was the role of Karnataka Chief Minister Basavaraj Bommai, who was the state's home minister when the scam took place.
He asked why international investigative agencies, including the Interpol, were not informed about the stolen Bitcoins.
"India's biggest ever 'Bitcoin Scam' has been unearthed in Karnataka. Instead of conducting a fair investigation, the BJP government of Karnataka appears to be preoccupied with 'Operation Bitcoin Scam Coverup'," he alleged.
"This is not a money laundering crime alone, this is an international crime. Considering how shoddily and compromised the investigation has been done, I don't think that the ED (Enforcement Directorate) or Karnataka Police can do a fair job. That is why we demand that an SIT (special investigation team) should be set up and monitored by the Supreme Court which should investigate this case and bring out the truth," the Congress leader said.
Surjewala also questioned the silence of Prime Minister Narendra Modi in the case and claimed that the prime minister was told by the FBI about it during his recent visit to the US.
"It is a multi-country investigation and the truth must come out. The government is either colluding or is working shoddily in the investigation.... There are doubts being raised on the reputation of Basavaraj Bommai and his political career and reputation are at stake and that is why he should write to the government for constituting an SIT monitored by the SC to probe this," he said.
Congress leader Rahul Gandhi tweeted: "Bitcoin Scam is big. But Bitcoin Scam Cover-up is much bigger. Because it has to cover up someone’s fake big ego."
Former Karnataka CM HD Kumaraswamy has alleged that the accused in the Bitcoin scam hacked into Jan Dhan accounts and transferred Rs 2 from each account, amounting to about Rs 6,000 crore.
"I have been told that hacking of Jan Dhan accounts happened. Rs 2 per Jan Dhan account was hacked and transferred. I don't know how true it is. It is worth Rs 6,000 crore. This is Jan Dhan alone," he said.
Submit documents on Bitcoin scam: Karnataka CM to Oppn leaders
Countering opposition leaders, Chief Minister Basavaraj Bommai has challenged them to elaborate as to what exactly is the Bitcoin scam and submit the documents, if any, to the investigation agencies, which are already conducting the probe into the issue.
Replying to questions from the reporters on the issue, Bommai said, "Let those who are making the allegations explain what exactly is the scam and who are involved in it. The case has been handed over to the Enforcement Directorate 8-9 months ago. Interpol Cell of the CBI too has been informed about the case which has international dimension."
Divergent figures are being quoted about the amount involved in the alleged scam. There was no documentary backing for the allegations, he said.
"Our government has an open mind about the issue. There is no question of shielding anybody. None of us are involved in it. Let them submit the documents in their possession to the investigation agencies, let the truth come out," Bommai said.
When asked about claims of the opposition leaders that the alleged scam would force him to quit, "it is a politically motivated allegation," he replied.
(With input from agencies)