In a shocking crypto breach of trust, an Indian police officer, Chandrahar SR, was recently bitcoin-scam-investigation-101717098751834.html” target=”_blank” rel=”noopener nofollow”>arrested for illicitly diverting bitcoin worth approximately 1.8 million rupees ($216,000).
This misconduct occurred amid an investigation into a major cryptocurrency scam dating back to 2017.
Scam and infringement
Chandrahar, a former inspector of the Central Crime Branch (CCB), took advantage of his position to access and transfer bitcoin from the digital wallet of a hacker involved in the scam.
This wallet was supposed to be secure evidence in an ongoing investigation into illicit activities spanning several high-profile attacks on cryptocurrency exchanges, including Bitfinex and Unocoin, orchestrated by hacker Srikrishna Ramesh and his accomplice Robin Khandelwal.
Even though the duo amassed around $660,000 through their cybercrimes, Chandrahar's actions precipitated a serious violation of the legal and ethical conduct expected of law enforcement officials.
The initial disappearance of btc led to the formation of a Special Investigation Team (SIT), which uncovered misconduct after noticing discrepancies in the handling of evidence.
Chandrahar, along with two other officers and a private cyber expert, Santosh Kumar, manipulated access to the wallet, forcing Khandelwal to transfer the funds and then attempting to erase any trace of his involvement.
His actions not only undermined the integrity of the police force but also jeopardized the entire investigation. The arrest was made after Chandrahar escaped capture following a failed attempt to obtain “anticipatory bail”. An SIT team official noted:
We have detained Chandradhar for five days after producing him before the court on Wednesday.
The charges against him and his accomplices include illegal confinement, breach of trust by a public servant and destruction of evidence. This case highlights a significant betrayal of public trust and underscores the challenges of policing digital assets within existing law enforcement frameworks.
India's stance on cryptocurrencies
This incident comes against India's increasingly strict stance on cryptocurrencies. Recently, the nation implemented “strong tax rules” on crypto transactions and took decisive action against several international crypto exchanges.
Notably, in December last year, India's Financial Intelligence Unit (FIU) issued compliance notices to several platforms, forcing them to comply with local regulations.
Additionally, the Ministry of Information was asked to block the URLs of nine prominent exchanges, effectively limiting their access within the country. Affected exchanges include Binance, Kraken, KuCoin, Huobi, Gate.io, Bittrex, Bitstamp, MEXC, and Bitfinex.
In response to these regulatory measures, Binance has taken significant steps to restore its regional operations. In April, the exchange fell in line with India's tax and anti-money laundering laws and paid a $2 million fine to reform its operations in South Asia.
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