Congress attacks Karnataka govt for India's biggest-ever Bitcoin scam; demands probe monitored by SC judge

Calling it India's biggest-ever Bitcoin scam, Congress chief spokesperson Randeep Singh Surjewala on Saturday said that the BJP government in Karnataka appears to be preoccupied with "Operation Bitcoin Scam Cover-Up", instead of conducting a fair investigation into it.

The remark came in the wake of allegations levelled by Congress leaders that Prime Minister Narendra Modi is trying to drop the investigation into the Bitcoin scam by telling Karnataka Chief Minister Basavaraj Bommai not to worry about it. Bommai had told reporters at New Delhi after meeting PM Modi on November 11 that Modi had asked him not to worry about the scam and focus on giving good governance in the state.

Surjewala, while addressing a press conference, posed several questions to the Bommai government asking it to reveal the actors in the ‘Bitcoin Coverup Scam’.

He also asked the government to disclose whether the stolen Bitcoins were transferred from the wallet of alleged hacker Sri Krishna. "How many Bitcoins and of what value were transferred? How does the Bengaluru police then suggest (in its third Panchnama dated 22nd January 2021) that the 31 & 186 Bitcoins allegedly transferred to the police wallet were lost or were found to be fake transactions?" he questioned.

Surjewala asked the government whether it investigated the correlation between “Whale Alerts” reflecting the transfer of the 14,682 stolen Bitfinex Bitcoins valued at Rs 5,240 crores and Sri Krishna's custody, suggesting that the illegal money was transferred to influential people to bury the case.

The Congress spokesperson questioned Bommai's role in the scam, who was the then Home Minister of the state when these illegal transactions happened.

Surjewala also questioned the government for not informing Interpol of such gigantic offences with international ramifications and waiting for five months up till 24 April 2021 to write to it, after the release of Sri Krishna on 17 April 2021.

He also asked the reason for the BJP government not to inform NIA, SFIO and ED.

The party lobbed six questions to Bommai as well as Prime Minister Narendra Modi, Home Minister Amit Shah and BJP president JP Nadda, including who were the actors behind the "operation coverup" and whether the Bitcoins recovered from Sri Krishna were transferred and why the Bengaluru Police initially admitting seizing it and then claiming that it did not do so.

"This is a case of intrigue, whitewash, concealment and deception smack of a deep-rooted conspiracy. It is India’s biggest ever 'Bitcoin Scam Cover Up' under the Karnataka BJP government. Instead of conducting a fair investigation, the BJP Government of Karnataka appears to be preoccupied with a cover-up," Surjewala told a press conference, which was also attended by Dr Gourav Vallabh.

Referring to Bommai's meetings with Modi and Shah, he said their "silence" is "even more shocking".

Surjewala referred to 'Whale Alerts', a Twitter account tracking largescale cryptocurrency transactions, reflecting the transfer of 14,682 stolen Bitfinex Bitcoins valued at Rs 5,240 crores on 1 December 2020 and 14 April 2021 when Sri Krishna was in custody and asked whether it has any correlation. "Whether it was investigated if some of the transferred Bitcoins were from Sri Krishna’s wallet?" he asked.

“Sri Krishna was arrested on 14 November 2020 and was kept in custody for over 100 days by repeatedly arresting him in five cases and was released on bail on April 17 this year. Bommai held the post of Home Minister between 20 August 2019 and July 28 this year and Sri Krishna arrest and release happened during this period,” he said.

"Despite multiple international crimes of significant magnitude, Interpol was not informed for over five months. Why was Interpol not informed despite such gigantic offences with clear international ramifications? Why did the BJP government wait for over five months up till April 24 this year to write to Interpol and that also seven days after the release of Sri Krishna on bail?" Surjewala said.

He said Sri Krishna Ramesh was kept in police custody for 100 plus days by repeatedly arresting him in at least 5 criminal cases registered one after the other. He was released on bail from police custody on 17th April 2021. Sri Krishna made a voluntary statement before the Metropolitan Magistrate, Bengaluru sometime in December 2020 (date unclear).

The Enforcement Directorate enquired about the case on February 15 and were only informed of one crime on March 3, he said. "What is the role and responsibility of the Chief Minister Shri Basavaraj Bommai (who was the Home Minister in charge at the relevant time) and others in the state government?" he said.

Surjewala also questioned the discrepancy in Bengaluru Police claims on the recovery of stolen Bitcoins from Sri Krishna. "How does the Bengaluru police suggest that the 31 and 186 Bitcoins allegedly transferred to the police wallet were lost or were found to be fake transactions?" he asked.

“On January 8th, 2021, Bengaluru Police recorded panchnama reflecting recovery of 31 Bitcoins from Sri Krishna. On Jan 12th, 2021, Bengaluru Police confirms this seizure of 31 Bitcoins worth Rs. 9 crores from Sri Krishna,” Surjewala said, presenting the relevant document to make his point.

“On January 22nd, 2021, Bengaluru Police allegedly tried to recover 186 Bitcoins from Sri Krishna (as reflected in the third Panchnama). According to the Bengaluru Police, the 31 and 186 Bitcoins were never transferred,” he said.

When questioned about Bommai's assertion that those who have evidence could give it to the ED, Surjewala said, "The Enforcement Directorate has become the Election Department of the BJP. The ED, Karnataka Police are not competent to probe the Bitcoin scam, which is an international crime. That's why we demand a SIT probe with expert investigators and monitored by a sitting SC judge."

What is Cryptocurrency:

A cryptocurrency (or “crypto”) is a digital currency that can be used to buy goods and services but uses an online ledger with strong cryptography to secure online transactions. Much of the interest in these unregulated currencies is to trade for profit, with speculators at times driving prices skyward.

The most popular cryptocurrency, Bitcoin, has had volatile price moves this year, reaching nearly $65,000 in April before losing nearly half its value in May. By mid-October, the price had risen rapidly again: it hit an all-time high above $66,000 before falling back slightly.

Cryptocurrencies appeal to their supporters for a variety of reasons. Here are some of the most popular:

• Supporters see cryptocurrencies such as Bitcoin as the currency of the future and are racing to buy them now, presumably before they become more valuable

• Some supporters like the fact that cryptocurrency removes central banks from managing the money supply since over time these banks tend to reduce the value of money via inflation

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• Some speculators like cryptocurrencies because they’re going up in value and have no interest in the currencies’ long-term acceptance as a way to move money