Hacker Sriki saga spooks a fledgling Bommai govt

Missing Bitcoins, irregularities in investigation and alleged involvement of politicos have raised serious questions about the extent of the cryptocurrency scam

In 2013, Srikrishna Ramesh had just dropped out of an engineering college in Bengaluru, when his father, Gopal Ramesh, insisted that he continue his education.

The 18-year-old then reluctantly enrolled for a BSc in Computer Science at the Eindhoven University of Technology in the Netherlands. Uninterested, he reportedly told his father that "the course and syllabus is all elementary to me."

Since then, Srikrishna alias 'Sriki' — or AP as he is known online — has lived a life fit for the silver screen.

When Bengaluru City Police arrested Srikrishna six years later in November 2020, in a case involving the hacking of a gaming website, little did they know that his arrest would turn out to be the biggest political nightmare for the state BJP government.

Now, a year later, Sriki’s alleged crimes have come back to haunt the Basavaraj Bommai government; coincidentally, Bommai was the Home Minister when Sriki was first arrested.

But how did a 26-year-old hacker spook the state administration?

Also Read | Voluntarily gave bitcoins to cops, claims hacker Sriki

Complaints filed against Sriki suggest that he was involved in a series of crimes: A high-value Bitcoin heist, importing narcotics, hacking into the government e-procurement site and siphoning off Rs 11.5 crore.

A full-fledged political slugfest has now broken out over the past two weeks, with both the ruling and opposition parties accusing the other of benefiting from the proceeds of Sriki's crimes.

There are also rumours of the involvement of top bureaucrats and politicians, and several irregularities in the investigations conducted.

As new information comes out, the case gets more bizarre each day.

At the heart of the scandal is the huge stockpile of high-value cryptocurrency Bitcoins — one Bitcoin is worth Rs 47.31 lakh — that Sriki is suspected to be holding. These Bitcoins were reportedly stolen from several cryptocurrency exchanges, poker and gaming websites that Sriki claims he hacked, in a statement he gave the police late last year.

The largest among the exchanges Sriki claims to have hacked is Bitfinex — the biggest heist of a crypto exchange in the world till August 2021. In his statement, Sriki said he hacked the exchange twice — first in 2015 (alone) and again in 2016, with help from other hackers.

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According to Bitfinex, around 1,500 coins were stolen in 2015, while the second hack involved a mind-numbing 1.19 lakh Bitcoins — estimated to be worth around Rs 56,000 cr today.

Though two Jerusalem-based hackers were arrested in connection with the Bitfinex hack in 2019, Israeli police were not able to recover the coins, leading them to suspect that more hackers were involved in the crime. Bitfinex also announced a $400 million bounty in August 2020 for information on these missing coins.

Other exchanges Sriki claims to have targeted are Bitstamp (making away with 19,000 Bitcoins), BTC-e.com (3,000 Bitcoins), Bitclub network, Bitcointalk.org, Bit-Central among others. These claims were recorded in his statement, which are part of two charge sheets filed against him at the first Additional Chief Metropolitan Magistrate Court on February 22 this year, which were accessed by DH.

From the time he was first arrested by the Bengaluru city police on November 17, 2020, Sriki has spent over 50 days in police custody, where he was grilled about his involvement in various cybercrimes.

He was handed over by the Central Crime Branch (CCB) to the Criminal Investigation Department (CID) cybercrime unit only in January 2021.

This, despite a letter addressed to the CCB by the Enforcement Directorate (ED) on December 1, 2020, in which Sriki is described as an "international hacker" and his case details were sought, to examine him under the Foreign Exchange Management Act and Prevention of Money Laundering Act.

The ED had to remind the CCB to submit the case details again on February 15, 2021.

Also Read | Bitcoin case: H D Kumaraswamy says he'll spill beans in 15 days

The Bengaluru city police submitted the case details to the agency only in March, and wrote to the CBI Interpol unit another two months later, on April 28.

These facts run contrary to Chief Minister Bommai's statement of October 29 this year, that the state government "referred the case to ED on March 3, 2021" as soon as the state knew about the hackers' accounts in foreign countries.

Even as Sriki sat in police custody, around 15,000 stolen bitcoins of Bitfinex were mysteriously transferred — first on December 1, 2020, and the second on April 14, 2021. And though Sriki — now accused in seven cases related to hacking and Narcotic Drugs and Psychotropic Substances Act — secured bail on April 7, he wasn't released until after April 14 as "bail surety was delayed," according to police officials.

While it is unclear if it was Sriki himself who transferred these stolen Bitcoins, Pranesh Prakash, co-founder of the Center for Internet and Society, says only the Bitcoin thief can transfer the stolen cryptocurrency. Moreover, he says the encryption techniques employed by various cryptocurrencies leave a unique trail, making Bitcoin and other cryptocurrencies "the worst form of bribe".

The transfer of stolen Bitfinex bitcoins was immediately flagged by Blockchain analytics firms, alerting several international agencies. Soon central agencies caught wind of these large transactions to unknown wallets. The ED and Intelligence Bureau then intensified the investigations — which are ongoing — to determine if these transactions flowed from Bengaluru.

But what really stirred the pot were reports that Prime Minister Narendra Modi was informed about this case during his US visit and that the Federal Bureau of Investigation (FBI) had landed in the city to investigate. Home Minister Araga Jnanendra, however, denied the FBI’s involvement and rumours of their visit to Karnataka.

As of today, the controversial case has captured the imagination of the public, and whistleblower complaints have reportedly reached the Prime Minister's Office. Bommai's recent trip to New Delhi is also under the radar due to the Bitcoin case. These factors have become a rallying cry for the Opposition, pushing the 100-day-old Bommai administration on the defensive.

While Bommai has pointed fingers at the Opposition, they remain unimpressed over the investigation by the police and have cried foul over the blacklisted Bitcoin transactions.

After his initial arrest in 2020, the city police issued a statement stating that 31 Bitcoins worth Rs nine cr were recovered from the hacker. Sriki claims to have handed over an unspecified amount of Bitcoins to the police, according to his statement in one of the charge sheets. However, documents show that Bitcoins and other cryptocurrencies were retrieved only from Robin Khandelwal's wallet — the other accused in the case. Recovery from Sriki's wallet failed, according to the panchnama.

Also Read | Congress demands SIT probe into Karnataka Bitcoin case

Cop connection

The Police Department first learnt of Sriki in November 2020. However, some clues in the charge sheet indicate that at least one policeman was in touch with him much before his arrest.

The charge sheet filed by the police details the hacker's stay at a five-star hotel in Bengaluru from May 4, 2019 to July 29, 2019. While many of the numbers Sriki dialed from his room (he did not use mobile phones) are either out of service or unreachable, two numbers were still active when DH dialled them. One of the numbers was the personal number of a serving police officer in the city.

There are also rumours that a case filed against Sriki at a Cybercrime Police Station in the city was 'settled' by the police. While a senior official, speaking under the condition of anonymity, denied any knowledge of Sriki's contact with the police before his arrest in 2020, he dismissed the rumours of "settlement" as baseless.

In another case (0091/2020) at Kempegowda Nagar police station involving Sriki, a police constable is also an accused. The case relates to the import of 500 grams of hydro ganja (cannabis) concealed in packets of organic coffee. But a charge sheet in the case is yet to be filed, more than a year after the case was registered.

Jet plane escape

Sriki had his first brush with the law in February 2018, in the high profile 'Farzi Cafe' assault case, after which Youth Congress leader Mohammed Haris Nalapad — with whom the hacker was hanging out — was arrested by the police on various charges.

While police were on the lookout for Sriki (also accused in the case) he fled in a car to Robin Khandelwal's Kolkata residence. Robin, another prime accused in cases registered against Sriki, also arranged a private jet for the hacker to fly out of Kolkata to an unknown location, so that he could successfully evade the police.

Now, there is already a legend about how Sriki was finally arrested. One theory goes that Sriki, who is allegedly a drug addict, had a dream in which God asked him to surrender, days after his friends were arrested in connection with the import of hydro ganja. Subsequently, he surrendered with Robin in front of the Chalukya Hotel.

The CCB has rubbished the claim. "We picked him up from a residence in Hebbal," said a senior police official privy to the investigation.

Unanswered questions

DH reached out to police officials seeking a response to several queries regarding the case against the hacker. While this correspondent was 'escorted out' of CID premises for seeking an interview with officials, a top Bengaluru City Police official maintained that the investigation into the case was carried out in earnest.

Requesting anonymity, the police official said the case was a challenge due to its uniqueness and that experts from the Department of e-governance and the Indian Institute of Science were roped in to provide technical assistance.

"We did not reach out to international agencies earlier because we could not verify whether all his claims were true," the officer said.

Yet, a lot of questions remain unanswered. Why was Sriki held in police custody for over 50 days? Why was there a delay in the city police escalating the case to national agencies? On whose behest was he importing large quantities of narcotics for a long period of time?

The Opposition Congress is clamouring for a court-monitored probe into the saga. While the case has led to a lot of hectic politicking, the BJP leaders have come out and denied that the case could see Bommai losing the Chief Minister’s chair.

Whether this will turn out to be the Bommai government’s Achilles heel, only time will tell.