Explained: What is the 'Bitcoin Scam' That Has Rocked Karnataka's BJP Govt?

In Karnataka, Chief Minister Basavaraj Bommai's government is in doldrums over an alleged multi-crore bitcoin scam that has hacker, Srikrishna Ramesh alias Sriki, at the centre of it. While the Congress has accused the Bommai government of covering up the scam – which according to the Opposition could implicate BJP politicians and high-ranking police officials – the BJP government in Karnataka has brushed off the matter as a "non-issue". The scam, however, was brought up during a meeting that Bommai had with Prime Minister Narendra Modi in the second week of November. So, what is the scam? And how has it impacted the state government? Read on.Bitcoin Investment Risky, But Rewarding: India's Crypto MillionairesThe case involves prime suspect Srikrishna Ramesh who stands accused of cyber fraud, drug peddling and cryptocurrency theft. Sriki is also accused of having hacked Karnataka government's e-procurement site and siphoned off more than Rs 11.5 crore. in 2019.In November 2020, the Central Crime Branch (CCB) had reportedly seized 31 bitcoins worth Rs nine crore from the Bengaluru-based hacker. These bitcoins are, however, no longer with the CCB, raising suspicion about corruption within the police ranks. Ramesh is also accused of drug trading through the dark web.The cryptocurrency row has turned into a political blame game in Karnataka with the Congress demanding an independent investigation into the matter by a Supreme Court-monitored Special Investigation Team (SIT).Sriki is a 25-year-old hacker who is being investigated by three different probe agencies – the Enforcement Directorate (ED), Cyber Crimes Wing of the Criminal Investigation Department (CID), and Central Crime Branch of Bengaluru Police.The oldest case on Ramesh dates back to 2018. He was reportedly questioned by different probe agencies.Sriki is accused of having hacked the Karnataka government's e-Procurement site in 2019.In this hack, the accused had planned to transfer a total of Rs 18 crore to one account and Rs 28 crore to the other” he said in a "voluntary statement" to the police. Police have not verified the authenticity of the statement. “I initiated the second transfer of Rs 28 crore while sitting in the Himalayas. This transaction was presumably refunded because the government apparently got to know about the dubious nature of the transaction,” Ramesh's statement read.In November 2020, the Central Crime Branch based on a tip-off arrested a man named Suneesh Hegde who was procuring hydro marijuana through dealers on the dark web. During interrogation, Hegde admitted that it was Ramesh who was helping him procure drugs. Srikrishna Ramesh was arrested on 17 November 2020. During interrogation, it was found that Sriki was involved in a series of online crimes.Ramesh had reportedly confessed to hacking and illegally transferring over 5,000 bitcoins to wallets of different parties. Each bitcoin is valued at nearly $65,000. Initially, the Central Crime Branch claimed that it had managed to recover 31 bitcoins estimated then at nearly Rs 9 crore. However, the claim was withdrawn later after the CCB alleged that the accused had misled the probing agency into thinking that he had transferred the coins.The Congress has accused the Bengaluru police of misappropriating bitcoins that were seized during the investigation. The Congress has accused CM Bommai of looking the other way even as he was Karnataka Home Minister when the case surfaced.“Instead of conducting a fair investigation, the state government appeared to be preoccupied with covering it up,” the Congress party has alleged.The party claims that the alleged bitcoin scam will cost CM Bommai his chair. Chief Minister Bommai on 14 November said that his government will act against all those involved in the scam. However, why did the Congress, which was in power in 2016 and 2018, not take any action, he asked. "Our government is open on this issue. We are the ones who exposed the case. It is our government which 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 said."If those involved are found to have perpetrated any fraud on the interests of the country, state or any individuals, we will act mercilessly against them," he reiterated.Amazon May Soon Allow Users to Pay in Bitcoin, Ether & Other Cryptocurrencies

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Explained: What is the 'Bitcoin Scam' That Has Rocked Karnataka's BJP Govt?

The political furore is over a 25-year-old hacker, Srikrishna, and his tryst with cybercrimes and cryptocurrencies.