An investigator from the Narcotics Control Bureau (NCB) of India has been accused of stealing bitcoins frozen from a 2015 drug bust where some 470 bitcoins (approx. $571,000 in current prices) were confiscated.
The NCB, essentially the Indian counterpart of the United States’ Drug Enforcement Agency (DEA), has alleged that one of its own agents involved in a previous drug bust has forged documents to withdraw frozen bitcoins. The case draws parallels to that of DEA agent Carl Force who plead guilty to bitcoin theft and extortion of Silk Road founder Ross Ulbricht during the DEA investigation of the Silk Road marketplace.
Notably, the local report adds that the case is the first ever instance of bitcoin misappropriation fraud in India.
The accused officer, Satyendra Kumar Singh, was a part of an investigation that led to a seizure of psychotropic drugs in mid-2015. The drugs, primarily banned anti-depressants and stimulants, were sent to US-based customers with transactions presumably made through a darknet drug-market.
Singh froze nine bitcoin accounts belonging to the drug dealer in June 2015. The frozen accounts contained a total of 470 bitcoins, approx. $110,000 at the time.
A year later, the NCB checked on the status of those accounts and discovered that they were untied and withdrawn by Singh. An internal investigation began.
Speaking to the Times of India, a crime branch official involved in the investigation revealed:
After the accused got bail from the Gujarat high court in 2016, the NCB sought a rerport on the status of the bitcoin accounts and leared that Singh had authorized the unfreezing of the accounts in July 2016 through a signed and stamped letter on an NCB letterhead. As no such authorization was given in the case, Singh came under the scanner and an internal inquiry was begun against him.
The investigation revealed that Singh had colluded with one of the accused drug dealers to forge official documents demanding the release of the frozen bitcoins from accounts at an unnamed bitcoin exchange. The bitcoins were released and transferred to other accounts before they were turned into fiat cash.
For his involvement, Singh pocketed 50% of the 470 bitcoins at approximately $280 per coin in July 2016 prices. Today, bitcoin is valued at $1,200 per coin.
Singh has since been suspended by the NCB and is currently under arrest. An investigation into the transactions of misappropriated bitcoins and Singh’s role in the crime is underway.
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Last modified: May 21, 2020 9:56 AM UTC