Karnataka Bitcoin scam: Arrested accused hacked Bitfinex exchange twice

Ramesh also informed that he had hacked into the Karnataka government's eProcurement site in 2019.

First Published13 Nov 2021
Cryptocurrency Bitcoin representation
Cryptocurrency Bitcoin representation

A 26-year-old accused in Karnataka's alleged Bitcoin scam has informed the police that he had twice hacked Bitfinex exchange during his stay in Netherlands.

The alleged hacker has been identified as Srikrishna Ramesh alias Sriki.

"Bitfinex was my first big Bitcoin exchange hack. The exchange was hacked twice, and I was the first person to do so. The second instance was a simple spear-phishing attack which led to two Israeli hackers working for the army getting access to the computers of one of the employees, which gave them access to the AWS cloud account," Ramesh said in his statement to the police.

Explaining how he managed to hack the bitcoin exchange, he said, "I exploited a bug in the data centre which gave me KVM (Kernel-based virtual machine) access to the server. I rebooted the server into GRUB mode, reset the root password, logged in, and reset the withdrawal server passwords and routed the money via bitcoin to my bitcoin address."

He said that he made a profit of around 20008 BTC (bitcoin).

He said, "I did not save anything. I spent around 1 to 3 lakh a day on alcohol and hotel bills on average. The price of bitcoin during the time of this hack was around USD 100 or USD 200, which I shared with my friend Andy from the UK."

Ramesh also informed that he had hacked into the Karnataka government's eProcurement site in 2019.

"We hacked this site in 2019 and made three separate transfers. Two of the accounts were given to me by Hemanth Mudappa for a total of 18 crore in one account and 28 crore in the other. Hemanth claimed he collected 2 crore from an entity called Ayub, whom I do not know. However, the CID claims that 11 crore was collected by Hemanth Mudappa," he said.

"I initiated the second transfer of 28 crores while sitting in the Himalayas. This transaction was presumably refunded because the government apparently got to know about the dubious nature of the transaction. I did not earn any profit from this; however, I did enjoy the proceeds of the crime by living in 5-star hotels and enjoying a luxurious lifestyle from the proceeds of the same," he added.

Meanwhile, former Karnataka chief minister and Congress leader Siddaramaiah alleged that politicians and officials were involved in a Bitcoin scam in the state. Siddaramaiah has also claimed that there was an effort to cover up the alleged scam but did not mention who the politicians were.

However, the Karnataka government has referred 'bitcoin scam' to the Enforcement Directorate (ED) and Central Bureau of Investigation (CBI) because of the international nature of transactions.

Notably, these allegations come ahead of by-polls scheduled in Karnataka in two constituencies. 

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