Helpers talk about deals, say police ‘hacker’ had a large stockpile of Bitcoin
AS PROSPECTS the financial transactions of alleged hacker Srikrishna aka Sriki in a cryptocurrency scandal, Enforcement Branch takes a close look at a Kolkata-based Bitcoin trading service provider who allegedly doubled as an accountant 26-year-old staff.
Between 2017 and 2020, Rs 5 crore in funds were reportedly provided by Bitcoin trader Rajeev Khandelwal to Srikrishna – including for chartering a private flight and yacht, and for stays in five-star hotels. Khandelwal was arrested along with Srikrishna in November 2020 for alleged drug trafficking using Bitcoins.
Khandelwal’s voluntary declaration to the police is part of an indictment filed against Srikrishna for allegedly hacking three Bitcoin exchanges and 10 poker sites.
While the six cases against Srikrishna do not speak of the exact cryptocurrency he holds, Khandelwal and another associate reportedly told police he owned a large number of them in 2018.
Khandelwal’s statement says he sold 130 Bitcoins given to him by Srikrishna between 2017 and 20, and Rs 3.48 crore from the sale was transferred to people as per his instructions, while Rs 1.5 crore was handed over in cash (allegedly by hawala) to Srikrishna.
One of the deals the ED is considering is the purchase of a Porsche Macan car for Rs 57 lakh by a politically linked associate of Srikrishna in January 2018 at a showroom in Bangalore, and the return of the vehicle to a one month delay. The accountant reportedly paid Rs 45 lakh for the car, and Rs 12 lakh was returned to the business he operated. Another alleged suspicious payment was Rs 26 lakh.
The ED is also reportedly considering payment of Rs 11.8 lakh in 2018 for a charter flight which was allegedly used by Srikrishna and his associates to fly from Chandigarh to Mumbai, and Rs 10 lakh for a yacht.
Khandelwal’s statement indicates that he came into contact with Srikrishna in April 2017 on a Bitcoin trading platform. “Srikrishna told me he was in possession of 900 Bitcoins. He asked me if I could sell his Bitcoins. I used to take the Bitcoins given by Srikrishna and send funds from my account banking… I would sell Bitcoins at a higher price, ”the statement read.
Khandelwal reportedly gave details of a 2017 deal, when Srikrishna told him to sell Ethereum tokens. “We received 30 Bitcoins in exchange, 20 of which were transferred to Srikrishna’s wallet,” the statement read.
According to law enforcement sources, Srikrishna hacked exchanges while staying in five-star hotels and using their internet, to avoid being tracked. In May-July 2019, he allegedly paid a bill of Rs 40 lakh in a hotel in Bangalore, while he was living with his family in the city.
Another associate reportedly said he paid Rs 2 crore in total in 2018-2020 for hotel stays in Srikrishna, in the hope of making a profit in cryptocurrency. “Srikrishna told me that he had a significant number of Bitcoins from the hacked exchanges,” said Khandelwal’s statement. “A lot of people were dancing around him (Srikrishna) hoping to get some of the Bitcoins he claimed to have,” law enforcement sources said.
One of those people is said to be a 35-year-old doctor’s son, who has been named in many cases involving Srikrishna. He told police that Srikrishna deposited Rs.3 crore from the sale of Bitcoins in 2019 into an account he provided.
Police records claim Srikrishna was also believed to have been held captive by some of his associates in 2020, prior to his arrest, in hopes of getting his hands on Bitcoins.
Allegations involving Srikrishna snowballed into political controversy in Karnataka. Srikrishna claims to have stolen more than 5,000 Bitcoins, and the opposition alleges that the “missing” part of this cryptocurrency has been hijacked by politicians and officials.