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Political Crypto-nite: Understanding The Karnataka Bitcoin Controversy One Byte at A Time

By: Rohini Swamy


Last Updated: April 12, 2022, 08:35 IST


The bitcoin scam hit the headlines around November 2021 after Bengaluru police arrested an international hacker called Srikrishna or 'Sriki'. Representational image/Reuters

The bitcoin scam hit the headlines around November 2021 after Bengaluru police arrested an international hacker called Srikrishna or 'Sriki'. Representational image/Reuters

While the ruling BJP says police probes continue, the Congress has alleged that the central and state investigating agencies have been withholding information on the issue as it may involve BJP leaders as well

The bitcoin scam that allegedly involved kickbacks to police and politicians in Karnataka continues to be an albatross around the state government’s neck. Priyank Kharge, a former Congress minister who in a tweet claimed that the FBI had landed in India to conduct investigations on the multi-billion bitcoin scam, stuck to his stand that the American agency was indeed on Indian soil.

“Why is the CBI shaken up by my tweet? My sources told me the FBI is in India and I tweeted the information that I had confirmed. By issuing a statement suo-moto clearly shows they have something to hide. My sources have confirmed to me that the FBI are in touch with the Ministry of External Affairs (MEA ), but I cannot reveal anything more," the Congress MLA told News18.

On Sunday, the Central Bureau of Investigations (CBI) issued a media statement clarifying the US law enforcement agency FBI “has not sent any team to India for conducting a probe in the matter nor has any request been made by FBI to CBI for conducting investigation in this case in India", once again bringing to focus the bitcoin controversy that has rocked Karnataka politics since November 2021.

While the ruling BJP rejected the accusations, stating that the police investigations continue, the opposition Congress has alleged that the central and state investigating agencies have been withholding information on the issue as it may involve BJP leaders as well. Chief minister Basavaraj Bommai had even met Prime Minister Narendra Modi over the issue but later issued a statement saying the PM had asked him to ignore the allegations.


On Friday, Kharge claimed the FBI is in Delhi to investigate the “billion dollar #BitCoinScam" and said “a lot of BJP’s skeletons will tumble out" if the matter is probed properly.

Soon after, senior Congress leader Randeep Singh Surjewala posed several questions to Union Home Minister Amit Shah and CM Bommai on the issue.

The CBI’s clarification came after Congress leaders including Surjewala and former Karnataka chief minister Siddaramaiah retweeted Kharge’s post and dared BJP leaders including Bommai to come clean.

Karnataka BJP spokesperson Capt Ganesh Karnik hit back at the Congress, saying the party is desperately trying to rake up an issue to remain part of the news cycle.

“I condemn their observation on the bitcoin issue. Just like the Congress has no weightage in the country today, this news also carries no weightage. The Congress with their 60 years of experience in governance, instead of being proactive and helping us with suggestions are looking for such non-issues to create news. The Congress’ connections with investigating agencies like the FBI, KGB in erstwhile USSR, are well known," Karnik told News18.

“Bitcoin is being discussed in Parliament and something is coming out at the national level. We should wait to see the results instead of knee-jerk reactions,” he added.

The bitcoin scam hit the headlines around November 2021 after Bengaluru police arrested an international hacker called Srikrishna or “Sriki”. The accused in his voluntary statements to the police revealed several of his financial exploits — hacking into the cryptocurrency exchange Bitfinex twice, rigging poker sites, hacking into government websites, social media handles of the politicians and allegedly paying bribes to police and politicians in the form of bitcoins.

This scam has led to several face-offs between the Karnataka BJP and Congress and the proceedings of the state assembly have been stalled several times due to this controversy.

“The CBI is an agency of the BJP. They will say what the government wants. Why did Bommai run to the PM? The FBI has come and it is a matter of time before it will be out. We need to connect the dots. The answer is there for all to see. CBI and ED have proved they are puppets of PM Modi. Our allegations are not baseless,” said Milind Dharmasen, general secretary, KPCC.

Life and times of Srikrishna— Sriki

At the centre of this massive row is Srikrishna Ramesh, who was first arrested in a drugs case in 2020. As the police probed further, Sriki’s involvement in several online crimes was revealed including hacking into the Bitfinex exchange, twice.

Senior police personnel whom News18 spoke to confirmed that while investigations continue on the bitcoin issue, it is “rather slow-paced”. After having questioned Sriki over several months, the hacker is under the surveillance of the top investigation agencies in the country.

“Bitcoin is a digital currency, but in our country, we do not have laws or rules governing this currency. Bitcoin as an asset is okayed by the SC, but as a currency is not permitted. So if there are some instances where people are involved in transactions and making money using bitcoin, it needs to be brought under certain regulations. Very soon we will have regulations in place and that will help ease of investigation by the police. Without a law, how can we book people like Sriki saying they have surpassed it? ” said a senior Karnataka official close to the investigations.

The life of Srikrishna Ramesh alias Sriki has all the ingredients for a potboiler film — mystery, crime, romance and money. The infamous hacker at the heart of the multi-billion bitcoin scam has no qualms in flaunting his hacking skills and lavish lifestyle.

Descent into darkness

In his voluntary statement to the police, Sriki had confessed how he used his hacking prowess to fraud gaming portals, and source drugs from the darknet using cryptocurrency. He also admitted to hacking into a government portal in Karnataka and the social media handles of several politicians and industrialists.

Born on March 30, 1995, Sriki at a very young age developed a keen interest in computers, so much so that by the time he was in class 4, he had learnt the basics of coding, JAVA, and reverse engineering. He claimed to have programmed his first bot for a game called RuneScape in 2004.

As his interest in technology deepened, Sriki began to scour the darknet. He joined the Internet Relay Chat (IRC)— a group of black-hat hackers— where he was trained in hacking and using the internet for monetary benefits.

In his statement, he claimed that when he was in class 8, not only had he become the moderator and administrator of IRC, but he had also begun mentoring other hackers on how to hack financial sites.

Police sources told News18 that Sriki’s circle of friends in school began to grow when he helped them with attendance by hacking into the students’ school portal Pupilpod.

“I hacked into Pupilpod and helped change the marks of my classmates. I collected Rs 30,000 per subject and made an overall sum of Rs 1.5 crore,” Sriki said in his statement.

However, the lure of money led to furthering his drug and drinking habits. By the time he was in his present university, Sriki was hooked on both vices and began hacking full time to ensure he continued his lavish lifestyle. He told the Bengaluru Crime Branch that he used to import drugs for personal consumption from the darknet market from a person by the name ‘Ross Ulbricht’. He continued to order drugs from the same person for the next 2 years, which were cleared by customs.

It was during this time that he developed an interest in bitcoins and began working on the darknet to collect the cryptocurrency.

Sriki’s statement speaks of how he befriended an Australian hacker named Shane Duffy who had the experience of hacking into Paypal accounts. Both joined hands to buy RuneScape accounts and play with the crypto money on a gaming site called Scythe.

By the age of 17, Sriki left for the Himalayas along with a friend named Rithvik. His Himalayan visits were known only after his parents filed a missing complaint and he was traced to a hotel near Mathura and brought back to Bengaluru. On the insistence of his parents, Sriki joined an engineering course, but his love for hacking and bitcoin remained in-satiated. He expanded his darkweb business and began creating his own network of bitcoin traders and hackers.

He left for Amsterdam to pursue a degree course in computer science where he met a driver named Walid Attadloui. This driver grew close and soon both began travelling across Amsterdam to deal in cash and crypto exchanges. Interestingly, Sriki in his statement claims that Walid broke into his house one day and stole money, a passport, two laptops and a hard drive. Though Walid was arrested, the police could not find Sriki’s laptops in which he claimed to have had $3 million in bitcoins.

Broke, frustrated and raring to hack again, Sriki, with the help of his fellow hackers, was goaded to break into the Bitfinex exchange in 2015. He struck gold, quite literally, and made a profit of 2,000 bitcoins, estimated to be worth around Rs 1.5 crore. He later claimed to have splurged the crypto money on a lavish lifestyle at five-star hotels and drugs.

Sriki decided to return to India in 2015 and for the next three to four years continued to hack into bitcoin exchanges and gambling websites. In the voluntary statement, Sriki claimed that he hacked the Twitter accounts of Rahul Gandhi, Barkha Dutt and other high-profile people in 2016. He talked of moving more than 80,000 euros from cold wallets in India to Europe. His hacking itch overpowered him again and he hacked into CCI Panama, an offshore hosting website, as well as the Bitclub networks server, from where he withdrew around 100 BTC.

“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," he said in his statement to the police.

“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.

Dirty games

A senior police officer close to the investigations told this reporter that Sriki used to hack into gambling websites like a PPoker Club for his friends.

“He would hack into the system and show the hand to the friend who was playing and make a tidy profit. He excitedly told us how he made Rs 2 crore from the PPoker Club and later blew the money on a lavish lifestyle,” the officer said.

Sriki also claimed to have hacked a gambling site called Poker Baazi and transferred Rs 70 lakh from the bank account. “His involvement in the infamous Bengaluru pub brawl case is also being investigated where he, along with the Congress MLA NA Haris’s son Mohammed Nalapad went absconding. He prides himself on hacking the Karnataka government’s e-procurement (tender) and syphoning off around Rs 11 crore in 2019, all while sitting in a seven-starred hotel in the Himalayan ranges,” the officer added.

While the hacker has syphoned, transferred and spent money, cash and cryptocurrency, he does not own a bank account. He told the police that all transactions would be done through the account of a friend called Robin who helped him convert bitcoins to currency.

Sriki and Robin met on bitcoin.com in 2017 while selling the cryptocurrency. They helped each other by selling bitcoins and using Robin’s account for transactions.

“Their partnership was very successful and they made close to Rs 6 crore via BTC. Sriki also would ask Robin to sell Ethereum and take a commission for it, the officer said.

But it’s the Bitfinex heist that has been the highlight of Sriki’s hacking profile. While Sriki claims to have spent all the money earned through his money heists on his lifestyle, political parties, ruling and opposition in Karnataka have been slinging accusations at each other alleging that bribes were paid in bitcoins by Sriki to the police and influential persons in the government after his arrest in November 2020.

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first published:April 12, 2022, 08:00 IST
last updated:April 12, 2022, 08:35 IST