Topic: [2017-04-09] India’s first bitcoin misappropriation case? (Read 362 times)

AHMEDABAD: It was a truly a crime with a digital fingerprint when officials of the Ahmedabad zonal unit of the Narcotics Control Bureau (NCB) accused one of their own officers of helping an accused to unfreeze his bitcoin account and withdraw 470 of the virtual coins, worth approximately Rs 3.5 crore.

While a few other police agencies in India have registered cases of fraud involving bitcoin, city police believe it is the first case of misappropriation of the digital currency. Bitcoin, defined as a crypto-currency, became popular from 2009 onward. Its use by online groups involved in illegal activities have drawn the attention of law-enforcement agencies worldwide.

In 2015, NCB busted a racket in Surat run by youths who would to send banned psychotropic drugs (anti-depressants and stimulants) to US based customers using an online platform. During the seizure, the officials found nine bitcoin accounts with a Bengaluru-based firm, containing 470 bitcoins. The accounts were frozen by Satyendra Kumar Singh, an NCB investigator, in June 2015.
"After the accused got bail from the Gujarat high court in 2016, the NCB sought a rerport on the status of the bitcoin accounts and leared that Singh had authorized the unfreezing of the accounts in July 2016 through a signed and stamped letter on an NCB letterhead. As no such authorization was given in the case, Singh came under the scanner and an internal inquiry was begun against him," said a crime branch official.

The inquiry revealed that Singh had indeed joined hands with one of the accused, Deepak Mangukiya, to unfreeze the accounts. Singh allegedly also called the Bengaluru-based firm, verifying the affidavit by Mangukiya where he had forged the signatures of his four partners and the letter from the NCB. After the unfreezing, the bitcoins were transferred to other accounts and encashed by the accused. Singh allegedly received 50% of the value. After the revelation, Singh was suspended by the NCB and a formal complaint was filed with crime branch.

"A team led by inspector S R Tandel was given investigation of the case. Singh and Mangukiya have been arrested and their remand secured up to April 13. The investigation will focus on the transactions and Singh's role," said a senior crime branch official.

Source - http://timesofindia.indiatimes.com/city/ahmedabad/indias-first-bitcoin-misappropriation-case/articleshow/58073166.cms