Indian Police Officer Arrested for Siphoning Over $200K in Bitcoin During Crypto Scam Investigation

An Indian police officer was arrested on May 31 for allegedly stealing Bitcoin worth INR 1.8 crore (approximately $216,000) during a crypto scam investigation.

Indian Police Scam Unveils Collusion with Bitcoin Wallet Hacker

The Special Investigation Team (SIT) of the Central Crime Branch (CCB) apprehended police inspector Chandradhar, marking the fourth arrest in the ongoing 2020 Bitcoin scam case. According to the Hindustan Times, Chandradhar accessed Bitcoin wallets illegally and stole Bitcoin worth INR 1.8 crore. Additionally, he destroyed evidence related to these transactions.

Chandradhar faces charges under several sections of the Indian Penal Code (IPC), including criminal breach of trust, mischief, common intention, cooperation in crime, and destruction of evidence. This investigation has also led to the arrests of two other police officers, Prashanth Babu and Lakshmikanthaiah, who were previously arrested for similar crimes. All three officers used their positions to unlawfully manipulate and access critical information.

India’s Rising Bitcoin Scams

India has seen an increase in Bitcoin scams and frauds, prompting regulators to enhance their oversight of the nation’s crypto sector. On May 1, the Central Bureau of Investigation (CBI) conducted a nationwide search operation targeting an app-based fraudulent investment scheme. The searches spanned 30 locations across 10 Indian states and Union Territories, focusing on two private companies and their directors involved in the HPZ Token App scheme. Investigators seized incriminating documents and digital evidence, such as mobile phones, hard drives, SIM cards, debit cards, and email accounts.

The fraudsters allegedly enticed victims to invest in the app by guaranteeing substantial returns on Bitcoin mining investments. So far, the probe has identified around 150 bank accounts used by the accused to collect funds from investors. The investigation is ongoing.

Historic Bitcoin Scams in India

This incident is reminiscent of the 2018 ‘Gain Bitcoin’ Ponzi scheme, where businessman Amit Bhardwaj defrauded over 8,000 individuals, amounting to INR 2,000 crore. Bhardwaj engineered a multi-level marketing scam, enticing investors to exchange Bitcoins with the promise of high returns, including an 18-month contract guaranteeing a 10 percent yield, which ultimately proved fraudulent.

In April 2024, Indian authorities seized $11 million from a top British-Indian businessman who received 285 Bitcoin from Bhardwaj.