A Special Investigation Team (SIT) of the Karnataka Criminal Investigation Department (CID) that is investigating a Bitcoin scam involving cryptocurrency allegedly stolen by international hacker Srikrishna Ramesh alias Sriki has questioned state youth Congress president Mohammed Haris Nalapad and his brother Omar Haris Nalapad over their past association with the accused.
The SIT, which is probing alleged police corruption in the original handling of the hacking cases following Sriki’s arrest in November 2020, is also looking at instances of possible usage of stolen cryptocurrency by the hacker with several high-profile associates.
“The questioning (of the Nalapad brothers) was with regard to the Cottonpet case (alleged hacking of multiple crypto exchanges by Sriki). Expenses for the hotel stay (of the hacker), travel and other expenses were met by some of the associates. This is being investigated,” an SIT source said.
The SIT began its probe into the Bitcoin scam in June 2023 at the instance of the new Congress government. It arrested Sriki and his close associate and fund manager Robin Khandelwal, 30, last month in connection with the June 23, 2017 hacking of Unocoin Technology Pvt Ltd’s crypto exchange in Karnataka which led to the theft of 60.6 Bitcoin valued at Rs 1.14 crore (at the then prevailing rate of Rs 1.67 lakh per Bitcoin).
According to statements given to the police in 2020 by Khandelwal, a Kolkata-based Bitcoin trader who doubled up as a crypto fund manager for the hacker, he sold 130 Bitcoins that were allegedly given to him by Sriki between 2017-20. A total of Rs 3.48 crore from the sale of the Bitcoins was allegedly transferred to the accounts of people indicated by Sriki while Rs 1.5 crore was provided in cash (through hawala routes) to Sriki himself.
The link to the Nalapad brothers
Following his earlier arrest in November 2020 by the Bengaluru Crime Branch police, Khandelwal had given statements to the police – these are part of the chargesheets filed by the Bengaluru police against Sriki and his associates in 2021 – that indicate links to the Nalapad brothers, sources said.
In his statements, Khandelwal has reported travelling to Bengaluru in 2018 after meeting Sriki online and carrying out a few crypto trades on his behalf. “In April 2017, Srikrishna, who sells Bitcoins at localbitcoin.com, met me online. Srikrishna chatted on the localbitcoin.com website and said that he had 900 bitcoins to sell. I agreed to this and received Bitcoins from Srikrishna and sent money from my account…,” Khandelwal stated.
During the visit to Bengaluru in January 2018, Khandelwal said he met Sriki at a five-star hotel with his friends, including Mohammad, Omar and their associate Mohammed Nafi, among others.
“At this time Srikrishna had hacked the databases of Bitcoin exchanges and kept a lot of Bitcoins with him. He showed me the Unocoin database,” Khandelwal’s voluntary statement to the Bengaluru police in 2021 states.
In February 2018, when Mohammed Nalapad was involved in a brawl at a pub in central Bengaluru and was arrested, Sriki who was in his company fled from Bengaluru and reportedly stayed with Khandelwal in Kolkata and other places, Khandelwal has claimed in his statement.
In the period that Sriki was on the run (till October 2018), they were allegedly joined by friends from Bengaluru in Delhi, Chandigarh, Himachal Pradesh and Mumbai. Omar Nalapad was among the friends Sriki and Khandelwal allegedly met during this time.
“When Srikrishna was at our house, he told me that he wanted to go to Mumbai, so I hired a car. I went to Mumbai with Srikrishna and joined Omar Nalapad, who was already staying at the ITC Maratha Hotel,” Khandelwal’s statement alleges.
Later, Khandelwal, Omar and four others are reported to have rented a private jet to fly from Chandigarh to Mumbai with the cost of the flight being borne by Khandelwal from the crypto funds provided to him by Sriki, as per Khandelwal’s statements.
According to Khandelwal’s bank account records – these were attached to the earlier chargesheets filed by the Bengaluru police against Sriki and his associates – Khandelwal paid Rs 11 lakh to a firm Chipsan Aviation Pvt Ltd at Sriki’s instance; Rs 45 lakh for purchase of a Porsche Macan car in Bengaluru by an associate; while Rs 27 lakh was given to an associate Mohammed Nafi, among others.
While there is no record of direct fund transactions between Sriki, Khandelwal and the Nalapad brothers, Sriki, in a statement given to the CID police in 2021 following his arrest in connection with a July 2019 hacking at the Karnataka government’s e-procurement portal, claimed to have made an “investment” of 150 Bitcoins and 1,100 Ethereum with Mohammed Nalapad after meeting the brothers in 2017.
“In 2017, I completed my degree and came back to India. After coming back to India, I became close to Nalapad (the younger son named Omar Haris Nalapad) and spent my days chilling with him,” reads Sriki’s statement to the CID cybercrime police in 2021.
“I gave his brother Mohammed Nalapad Haris 150 BTC and 1100 ETH and he claimed that it was an ‘investment’ to be returned in six months as clean white money,” the statement adds.
Police sources said that Sriki has made many statements about giving away cryptocurrency but the statements have been denied by those named by the hacker. The statements, however, are a subject of investigation and verification, the sources added.
Last month, the SIT quizzed the son of a senior Karnataka IPS officer over the hacking cases involving Sriki. The senior IPS officer’s son was questioned over his role in the purchase of a Rs 57 lakh Porsche Macan car by a group of youths using funds allegedly provided by Khandelwal in January 2018.
“Sriki and associates got funds from multiple hacking crimes. The stolen cryptocurrency was converted using the services of the accountant and used for various purposes – purchase of cars, booking flights, hotel fares. The purchase of the Porsche car is under investigation for use of funds obtained by hacking,” an SIT official said.
A look at the Bitcoin scam
Hacker Sriki and his accountant Robin Khandelwal were initially arrested by the Bengaluru Crime Branch in November 2020 on charges of buying drugs online using Bitcoin. The case eventually led to the cracking of several cybercrimes in Karnataka, including a Rs 11.5 crore heist from the state e-procurement portal in 2019.
The handling of the cases involving Sriki under the BJP regime in Karnataka after the arrests in November 2020 resulted in allegations of corruption by the Congress when it was in Opposition between 2020-2023. It is also alleged that police officials grabbed a large cache of Bitcoin that was found in the crypto wallets of the hacker Sriki after his arrest in November 2020.
At the time of Sriki’s arrest in 2020, the value of one Bitcoin was in the range of $25,000 (around Rs 20 lakh) and soared to as high as $60,000 (around Rs 50 lakh) by April 2021.
Shortly after it came to power in Karnataka in May 2023, the Congress government constituted a CID SIT on June 30, 2023, to probe the Bitcoin scam from the BJP tenure.
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