Delhi court asks CBI to consider taking over cryptocurrency fraud case probe
A Delhi court examining a cryptocurrency fraud of around ₹2,000 crore has asked the Central Bureau of Investigation (CBI) to consider taking over the probe from Delhi Police suspecting involvement of a syndicate.
The recent order by additional sessions Judge Sumit Dass of Patiala House Court on May 1 was passed while hearing a bail application moved by the prime accused in the case, a West Bengal resident SK Masud Alam. Earlier, his two bail applications were rejected by the city court.
On July 18 last year, leading cryptocurrency platform WazirX suffered a cyber attack resulting in the theft of nearly ₹2,000 crore.
Zanmai Labs Pvt. Ltd, the company operating WazirX had approached the Delhi Police and lodged a complaint with the Delhi Police Intelligence Fusion and Strategic Operations (IFSO) unit.
WazirX stores crypto funds invested by its customers to various third-party Multi Signature Wallets.
Last year, the company noticed that the entire custody of wallets had been drained off and subsequent probe revealed that the Multi Signature Wallets had been hacked with a total transaction of 234 million US dollars.
A case pertaining to criminal conspiracy and cheating was registered by the Delhi Police under the Bhartiya Nyaya Sanhita (BNS) and the name of one Souvik Mondal, a resident of Medinipur in West Bengal, cropped up during probe. Mondal’s account was registered on the platform on July 11, and he had received a crypto deposit of over ₹91 lakh in his WazirX account.
Police later found that Mondal’s account was registered in the name of one SK Masud Alam.
In the May 1 order, ASJ Dass said that before deciding on Alam’s bail plea, the court would like to delve into why cyber fraud, having international ramifications, merits an investigation by a central agency.
The order said, “… this particular case is one which requires it to be investigated by any national or central investigating agency like CBI. Ramification of this case, particularly the magnitude of the offence, the manner in which the offence has been committed and the footprints which may be all over the world — require to be thoroughly investigated”.
The court said that the entire module which had the knowhow to decode or breach the security code system has to be comprehensively busted.
The court further said that there was another angle to the case which needed to be investigated by the concerned probe agency.
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“There may be a participation of a syndicate/state support behind the fraud as it affects the industry/entrepreneurship and the amount so siphoned/cheated can be used for many more illegal activities,” the order said.
The court noted that Alam had been in judicial custody for more than eight months and his bail plea has been moved on repeated occasions due to the investigation making no progress.
ASJ Dass said that the Investigating Officer (IO) of the case has submitted that they had sent notices to various organisations, the details of which were kept confidential, as it included government and investigating organisations.
The court said that it is not directing any transfer of investigation as yet, even as it directed a copy of its order to be sent to the director of CBI for taking a call based on its suggestions. The bail application will be heard next on May 19.
Alam was arrested from Medinipur in August last year and during interrogation, he revealed that he came into contact with one M. Hasan through the social media app Telegram, who in turn offered him a good amount for getting WazirX crypto platforms with credentials.