Questions about links between a Bengaluru hacker and a bitcoin theft investigated by the FBI in 2016

A 26 year old Hackers arrested in Bengaluru last year who claimed a few years ago to have hacked Bitfinex, a Bitcoin exchange based in the British Virgin Islands, is believed to be a person of interest to the US Federal Bureau of Investigations (FBI) based on a police case registered in 2016.

Bengaluru police arrested Srikrishna Ramesh aka Sriki last November in a case of buying drugs online with bitcoins, finding that the defendant and his staff were allegedly involved in several hacker crimes in India and abroad.

Srikrishna is currently at the center of controversy in Karnataka after allegations that bitcoins in his possession were used to pay police officers and others involved in investigating cases against him.

In a voluntary statement to the police after his arrest in November 2020, Srikrishna stated in several places that he was involved in a hacking incident at the Bitfinex exchange as part of a hacker group in the Netherlands.

Although the hacker himself only pointed to his involvement in a hacking incident in 2015 when a small amount of around 1,500 bitcoins were stolen from the Bitfinex exchange, questions about his alleged connection to a hacking incident on Jan. , 2 lakh bitcoins (valued at around $ 70 million then and now valued at around $ 7 billion) have been stolen from the Bitfinex exchange.

Shortly after the theft on August 2, 2016, an unidentified complainant filed a complaint with police in the US city of Cambridge, Massachusetts, stating that “his Bitcoin account was hacked and $ 1,300,000 ($ 70,000,000 in bitcoins) was stolen ”. The complaint – available in the Cambridge City Police Department’s daily logs online archives for September 14, 2016 – reportedly related to the August 2, 2016 Bitfinex hack.

When The Indian Express asked about the status of the case, a Cambridge police officer said the investigation was being conducted by the FBI.

“The Cambridge resident had an account with a digital asset trading company that was hacked and resulted in bitcoins being stolen from an unknown number of its account holders. The company notified the FBI and they directed the investigation into the hack. The Cambridge resident reportedly recovered money from his losses, ”Cambridge Police Director Communications Director Jeremy Warnick wrote in an email response.

Based on a request for information from The Indian Express under the FBI’s Freedom of Information / Privacy Acts system, the FBI stated in a response that in relation to the Bitfinex exchange hacking incident that the complaint was made, “Was unable to identify records”. was filed in Cambridge. Michael Seidel, an officer in the FBI’s Information and Record Dissemination Division, said that “a search was made of the places where records could reasonably be expected” and “we have no record of the Bitfinex hacking case.” could identify “.

In a voluntary statement to the police, Srikrishna spoke about hacking the bitcoin exchange Bitfinex in 2015 and illegally accessing bitcoins.

“Bitfinex was my first major Bitcoin exchange hack. The exchange was hacked twice and I was the first to do so. The second instance [in 2016] was a simple spear phishing attack that resulted in two Israeli hackers working for the army gaining access to the computers of one of the employees who gave them access to the AWS cloud account, ”Srikrishna told police.

According to his statement, Srikrishna made “about 2000 BTC (Bitcoins)” out of the Bitfinex hack and blew the entire amount into a “luxurious lifestyle”.

The hacker also claimed that on a number of occasions he managed to sell the stolen bitcoins by using obfuscation techniques to avoid detection.

In an additional statement on a case accused of hacking a poker game site, which is annexed to the indictment in the case, Srikrishna has alleged that he volunteered to sell bitcoins that were in his possession hand over to the police. “I understood the case scenario that even if I didn’t give them the bitcoins, after talking to the investigator they could use forensic methods to find the bitcoins. So after the deliberations I voluntarily agreed to give away the bitcoins that I had kept in different wallets in different crypto currencies, ”the statement said.

However, the Bengaluru Police have denied allegations linking Srikrishna to the 2016 Bitcoin raid.

“He was involved in stealing small amounts of bitcoins, not large robberies as we found out,” said a senior official. “There were many allegations made by him (Srikrishna), but they were not substantiated during the investigation,” the officer said.

While Srikrishna has claimed no links to the August 2016 hack, blockchain analysts reported on social media that a large amount of nearly 12,000 bitcoins from that theft – valued at around $ 750 million – were moved earlier this year.

When the stolen bitcoins were allegedly transported on April 14th of this year, Srikrishna was in prison in Bengaluru and was only released on April 17th.

Opposition Congress has linked Srikrishna’s release from prison to the movement of stolen bitcoins in 2016, suggesting that they were used to pay politicians and police officers.

“The indictment filed by the CCB police records that the defendant plundered 5,000 bitcoins through unethical hacking. Who is holding these bitcoins now? Did you have it transferred to law enforcement accounts? Or are they clueless? ”Congress chief Siddaramaiah said on social media.

However, police have denied proposals that Bitcoins stolen by Bitfinex were transported out of Bengaluru in April.

“The claim by Whale Alert (a social media account that tracks Bitcoin movements) that 14,682 stolen Bitfinex bitcoins were transferred is completely unfounded. There is nothing to suggest that it originated in Bengaluru, ”police said in an official statement on November 12th.

While the Bengaluru police wrote to Interpol on April 28, 2021 about the hacker’s alleged crimes, the Karnataka or Bengaluru police said they had not yet heard from international authorities.