Karnataka’s Crime Investigation Department Special Investigation Team probing the state’s high-profile Bitcoin scam has filed closure reports in two cases against police officers after the state government declined to grant prosecution sanction. Simultaneously, the SIT has filed a chargesheet against private cyber expert K.S. Santhosh Kumar, while the Enforcement Directorate presses ahead with a separate money laundering investigation.
On July 1, the SIT submitted a “B Report” seeking closure of a January 2024 corruption and fraud case against four police officers, and filed a closure report in a related August 2023 FIR alleging tampering with electronic evidence, including laptops and mobile phones seized from hacker Srikrishna Ramesh, alias Sriki. The SIT said further prosecution could not proceed once the Karnataka government refused the mandatory sanction required to prosecute serving officers.
A Case Born From a 2017 Hack
The scandal traces back to a hack of Tumakuru-based Unocoin Technologies in June 2017, when unknown attackers allegedly stole 60.6 bitcoins then worth ₹1.14 crore. The case gained national attention only after Sriki’s unrelated 2020 arrest in a narcotics case, when investigators found he had allegedly moved bitcoins worth roughly ₹10 crore between wallets using a laptop smuggled into custody, reportedly with a bribed constable’s help.
That revelation triggered scrutiny of how the original Central Crime Branch investigation had been handled, and the state’s Congress government constituted the SIT in June 2023 to probe allegations of corruption, evidence tampering and procedural irregularities across multiple hacking cases handled between 2019 and 2023. Investigators went on to allege that certain police officers had received illegal kickbacks to dilute criminal cases against Sriki and his associates.
What the Closed Cases Alleged
The January 2024 case named five accused, including Santhosh Kumar, the private cyber expert engaged by the Central Crime Branch during its hacking investigations. Investigators allege he unlawfully accessed a cryptocurrency wallet belonging to one of Sriki’s associates and diverted bitcoin worth approximately ₹1.83 lakh into his own wallet, leading to his arrest.
The broader probe surfaced a list of procedural failures: inadequate documentation of login credentials for seized devices, allegations of illegal detention, and a claim that a laptop worth around ₹60,000 was provided to Sriki during the investigation, the very device later linked to his alleged bitcoin transfers from custody.
The Enforcement Directorate’s Widening Money Trail
While the SIT’s police-corruption threads have now stalled at the sanction stage, the ED’s parallel financial investigation has accelerated. In May 2026, the agency arrested Sriki, his accountant Robin Khandelwal and associate Sunish Hegde under the Prevention of Money Laundering Act, filing its prosecution complaint before a Bengaluru court on July 7. The ED alleges the trio hacked multiple online gaming platforms, cryptocurrency exchanges and Karnataka’s e-procurement platform, laundering stolen virtual digital assets through exchanges and bank accounts.
The ED’s probe has also drawn a direct line to Karnataka’s political establishment. Coordinated raids in April at the residences of Shantinagar MLA N.A. Harris and his son, Youth Congress leader Mohammed Nalapad, formed part of the same PMLA investigation, with the agency alleging Nalapad helped convert Sriki’s bitcoins into cash through Mumbai-based associates and hawala channels, and had received substantial commissions in the process. Investigators say a suspicious ₹10 lakh transaction into Nalapad’s account first exposed the wider network, and the agency has since prepared a third summons for him after earlier questioning yielded limited cooperation.
A Verdict on Evidence Integrity
Prof. Triveni Singh, the former IPS officer and cybercrime specialist, said cryptocurrency-related investigations demand strict preservation of digital evidence, an unbroken forensic chain of custody, and complete procedural transparency. He noted that any lapse or suspected tampering with electronic evidence can significantly weaken prosecution and erode the credibility of investigations into organised cybercrime.
That warning captures the case’s central irony: a scandal that began as an investigation into police protecting a hacker has, through the government’s refusal to sanction prosecution, ended with the officers walking free, while the financial trail those same officers were accused of covering up is now the very thread pulling the ED deeper into Karnataka’s political establishment.
