Indian National Congress Accuses Modi-Led BJP of Covering Up Country’s Biggest Bitcoin Scam

Leaders accuse the prime minister of trying to drop the investigation.

AccessTimeIconNov 13, 2021 at 4:21 p.m. UTC
Updated May 11, 2023 at 5:27 p.m. UTC

Bitcoin is about to become an even more popular topic in India, with the country’s leading political parties at loggerheads over a multimillion-dollar scam involving the top cryptocurrency in the southern state of Karnataka.

On Saturday, Randeep Singh Surjewala, a spokesperson of the Indian National Congress (INC), the main opposition party, accused the Bhartiya Janta Party (BJP) government of Karnataka of covering up the scam and asked Chief Minister Basavaraj Bommai to reveal the names of actors involved in the fraud.

“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,” Surjewala during a press conference. “Instead of conducting a fair investigation, the BJP Government of Karnataka appears to be preoccupied with a cover-up.”

Surjewala’s comments came after several Congress leaders said Prime Minister Narendra Modi is trying to drop the investigation, asking Bommai not to worry about the issue.

“Instead of asking @CMofKarnataka to investigate & prove the innocence, how is it correct for @PMOIndia to tell him to ignore the allegations? Can Prime Minister unilaterally decide what he wants?,” Karnataka’s former chief minister and senior leader of Congress Siddaramaiah tweeted Friday.

“We don’t know if Bommai is involved in Bitcoin scam or not. All we are asking is to investigate it properly & punish the guilty. Why is Narendra Modi asking CM to ignore?,” Siddaramaiah added.

The scam dates back to 2019 and came to light a year ago after Bengaluru’s Central Crime Branch police arrested a hacker named Srikrishna and his associates in a narcotics case. During the investigation, the police found out that Srikrishna was the mastermind behind the alleged hacking of the Karnataka government’s e-procurement portal in 2019. The hacker siphoned off more than 10 crore rupees (US$1.3 million), according to ThePrint.

Srikrishna also confessed to having hacked crypto exchange Bitfinex in 2016 and walked away with 2,000 bitcoin, according to the statement released by Congress’ Surjewala. Bengaluru police in January claimed to have recovered 31 bitcoin valued at 9 crore rupees from Srikrishna. However, the investigation team retracted the claim later, saying stolen coins were never transferred from Srikrishna’s wallet.

Congress's sstatement on the bitcoin scam
Congress's sstatement on the bitcoin scam

In a press release, Surjewala asked the government to disclose the role of Karnataka Chief Minister Basavaraj Bommai, who was the state’s home minister when the scam took place, and asked why Interpol was not informed about the stolen coins.

“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 and 186 bitcoins allegedly transferred to the police wallet were lost or were found to be fake transactions,” Surjewala asked in the release.

Congress's statement on the bitcoin scam
Congress's statement on the bitcoin scam

The Congress spokesperson also asked the government to investigate whether Srikrishna moved the stolen Bitfinex coins when he was in custody in December 2020 and who the recipients were. As possible evidence, Surjewala cited “Whale Alerts,” a Twitter-based tracker of big crypto transactions, showing a transfer of the 14,682 stolen Bitfinex bitcoins on Dec. 1, 2020.

So far, BJP leaders have maintained that accusations of involvement of party leaders in the scam are rumors.

Congress stepped up its attack on the government concerning the alleged bitcoin scam earlier this week after Karnataka’s chief minister, Bommai, left for New Delhi to meet Prime Minister Modi. Speculation regarding the involvement of BJP bigwigs reached a fever pitch early today after Congress leader Rahul Gandhi, the scion of the Nehru-Gandhi dynasty, tweeted that the scope of the cover-up is much bigger than the scam itself.

Meanwhile, the Parliamentary Standing Committee on Finance has invited cryptocurrency players to discuss the opportunities and challenges of the industry in a meeting scheduled for Nov. 15. Crypto exchanges WazirX, CoinSwitch Kuber and CoinDCX are reported to be among the invitees.

Parliamentary Committee's invitation to crypto players
Parliamentary Committee's invitation to crypto players


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Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.

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