Karnataka HC denies advance bail to cop who 'misused Bitcoins worth Rs 850 crore'

Bengaluru: The High Court of Karnataka has denied anticipatory bail to a police inspector accused in the Bitcoin case. 

The petition was moved by D M Prashanth Babu, who was the police inspector in charge of the Technical Support Centre in the Central Crime Branch (CCB). He is currently a deputy superintendent of police. 

Justice M G Uma noted that the Cyber Forensic Analysis Report indicates that the contents of the Apple MacBooks of accused Srikrishna alias Sriki were transferred to Babu’s desktop in his chamber at the Technical Centre. 

The prosecution contended that Babu handled 4,000 Bitcoins while copying data from the MacBooks in November 2020. At the time, one Bitcoin was valued at about $29,000 or approximately Rs 21.2 lakh. So, Babu handled Bitcoins worth about Rs 850 crore. 

Srikrishna, a serial hacker, is suspected to be the key player in the Bitcoin case, which first surfaced in 2020. 

A total of four criminal cases were registered against Srikrishna in 2020  — at Cottonpet, Ashoknagar, KG Nagar and Cyber Crime police stations in Bengaluru. All these cases were transferred to the Special Investigation Team (SIT) in May 2023. 

Babu claimed he was first apprehended on January 24, 2024, remanded in police custody and his voluntary statement was also taken. He added that on June 28, 2024, a notice was issued against him under CrPC Section 41A to appear before the investigating officer. He moved the high court apprehending arrest again in the case. 

P Prasanna Kumar, a special public prosecutor representing the SIT, informed the court that after Srikrishna’s arrest, police had seized two MacBooks in November 2020. These devices were handed over to Babu in a sealed condition. 

According to Kumar, the SIT received the forensic science report on the MacBooks in July 2023. The report said that the MacBook, the hard disk and the pen drive seized in the crime operated between November 17, 2020, and November 21, 2020. During this period, the devices were supposed to be in sealed cover. However, the SPP noted, there was illegal access to the gadgets. 

The Cyber Forensic Analysis Report obtained from the Centre for Development of Advance Computing (C-DAC) indicated that after copying the contents of the MacBooks, Babu “actively connived” with the other accused to install a crypto hardware wallet, electrum wallet and data-wiping applications, the prosecution said. 

According to the statement of B S Gagan Jain, a private cyber expert, under CrPC section 164, the gadgets contained about 4,000 Bitcoins at the time of transfer of the contents to Babu’s desktop. The price of one Bitcoin in November 2020 was about $29,000, approximately Rs 21.2 lakh. It was stated that the total value of Bitcoins handled by the petitioner was about Rs 850 crore. 

Justice Uma noted, “The data-wiping tool was also found to have been installed, which was being used for deletion of files and folders from the computer. It is stated that the wiping technique prevents forensic tools from recovering the deleted contents by the mechanism of overwriting the data with junk. The application data was said to be located under the user name of the petitioner. The report refers to as many as 16 files in the category of deleted directory the source of which finds the user name as that of the petitioner.” 

The court further said: “When such prima facie materials are available to suggest meddling with the electronic devices seized in the matter, the petitioner, being the head of the Technical Support Centre to whom the gadgets in sealed condition  were entrusted, is liable to give reasonable explanation.”