An investigator from India’s Narcotics Control Bureau has been arrested for stealing Bitcoin that were connected to a drug bust.
According to the reports, an NCB officer has allegedly assisted in the theft of over 400 Bitcoin that were originally confiscated and frozen after a seizure in 2015.
The misappropriation of Bitcoin funds follows in the wake of warnings that India’s Ministry of Finance has recently issued regarding digital currency or virtual currency.
Misappropriation of Funds
For several years now, the NCB has busted several top vendors involved in darknet operations. One of the investigations took place in 2015, and the law enforcement entity is now facing a controversy connected with the Bitcoin that was frozen after this drug bust.
NCB officials are being scrutinized, seeing as one of the agency’s investigators has been accused of misappropriation of funds.
Stealing Seized Bitcoins
An officer of NCB, Satyendra Kumar Singh, had allegedly partnered with darknet vendors and stole the Bitcoin that was frozen by the agency. The darknet vendor group was arrested by the NCB in Surat.
The group was accused in a drug bust case for the trafficking of prescription anti-depressants and stimulants. Singh was an investigator in the case leading to the seizure of these drugs.
The vendors had been sending these drugs to customers in the US, making the transactions using a darknet market. Singh froze nine Bitcoin accounts connected with the drug dealer in June 2015.
The frozen accounts consisted of 470 Bitcoin, which valued approximately at $110,000 at the time.
The vendors were eventually released with bail and were later caught collaborating with Singh in receiving the stolen digital currency. The bail was granted by the high court of Gujarat in 2016.
The NCB then looked into the status of the frozen Bitcoin accounts and discovered that the aforementioned official had authorized the accounts to be unfrozen in July, by means of a stamped and signed letter using the NCB letterhead.
Singh was not given any such authorization to unfreeze the Bitcoin account, so he has come under review with an internal inquiry against him.
The NCB can be considered as the Indian equivalent of the US Drug Enforcement Administration, and it has accused one of its own officials of being involved in this shady deal with the accused vendors of drug trafficking.
The local reports claim that this is the first time that Bitcoin fraud has been committed in the country.
The forged letters on the NCB letterhead had been used for demanding that the 470 Bitcoin should be sent to Singh.
The official then sent the funds to vendors who were out on bail, keeping half them for himself. It is also alleged by the investigators of the case that one of the drug vendors, Deepak Mangukiya, had bribed Singh.
Singh has since been suspended from his duties with the NCB. He has officially been accused and has been detained with Mangukiya. Prosecutors state that investigations against the two will continue.
S.R. Tandel leads the investigation and both suspects will be held in custody until the April 13th. The investigation concerns the Bitcoin transactions and Singh’s involvement in it, according to a senior official.
It is alleged that Singh had taken around 50% of the total 470 Bitcoin, at the rate of $280 for each coin, according to the July 2016 pricing. At present, each bitcoin is worth nearly $1200.
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