The Enforcement Directorate (ED) of India's financial crime investigation agency has requested police assistance in a case of bitcoin theft worth Rs. 6 crores ($790,000) by investigators who were supporting the police in a crypto fraud case worth over $260 million.
What is the situation?
According to reports in the media, ED agents went to the office of Pune's Commissioner of Police in Maharashtra province on Saturday to gather information about the crime.
The case involves two private cryptocurrency investigators who are accused of moving 1,137 bitcoins while assisting the Pune police in their investigation of a fraud. Pankaj Ghode, a cryptocurrency expert, and Ravindra Patil, an Indian Police Service (IPS) officer who had taken voluntary retirement and was working as a private digital asset investigation expert, were arrested earlier this month, according to CryptoPotato.
The case in which Ghode and Patil were assisting the authorities involves an 87,000 bitcoin cryptocurrency scam that included at least 8,000 investors in 2018. The ED estimates that these bitcoins are worth Rs. 20,000 crore ($262.3 million) at the current market rate.
During an investigation, Bitcoin was stolen.
According to the Pune Police's First Information Report (FIR), Ghode and Patil were hired to retrieve bitcoins from Amit Bhardwaj's e-wallet. The essential information was obtained from Bhardwaj and passed on to the two private investigators for this reason.
Rather than play by the rules, they transferred 1,137 bitcoins to their wallets and provided the cops with forged screenshots of Bhardwaj's wallet. Through a KYC check of the accused, higher police officers were able to determine the wrongdoing, and a case was filed against them, resulting to their arrest.
The ED is pursuing Amit Bhardwaj and his colleagues, mostly family members, in the GainBitcoin case. Due to the lack of a law in India that specifically addresses cryptocurrency fraud, cases involving bitcoin are dealt with under several laws depending on the nature of the crime. The GainBitcoin case was filed under the Money Laundering Prevention Act (PMLA), and Amit Bhardwaj was released on bail.
A Long History of Cryptocurrency Scams
While India does not have a legislation particularly addressing crypto-related offences, there have been several stories of investors being duped by bogus claims of huge profits on bitcoin investments.
In one such case, the ED nabbed a suspect in the infamous Morris Coin case earlier this month.
Following his arrest under lenient parts of the Indian Penal Code in 2020, the alleged wrongdoer was granted bail and fled the country. There were fewer complaints at the time, and the fraud's full scope was revealed. According to estimates, the fraud cost at least $160 million and included at least 900 investors.