Criminal Prosecutions in Crypto Saga: 14 Individuals Arrested, Among Them Police Officers and a Former Member of the Legislative Assembly in India
In a landmark verdict, an Indian anti-corruption court has sentenced 14 individuals, including 11 police officers and former legislator Nalin Kotadiya, to life imprisonment for the kidnapping and extortion of businessman Shailesh Bhatt over cryptocurrency.
The case, which has highlighted growing concerns over the intersection of traditional crime and emerging digital assets, began in February 2018 when Bhatt was tricked into visiting a gas station by individuals impersonating officers from India's Central Bureau of Investigation. He was later abducted.
The charge against Kotadiya and the 11 police officers related to Bhatt's kidnapping was filed by the CID Crime Branch of Gujarat, following Bhatt's complaint and investigation into a Bitcoin extortion case.
Special Judge B.B. Jadav presided over the case, which saw the convicted individuals found guilty of criminal conspiracy, kidnapping for ransom, unlawful detention, assault, and criminal misconduct by public servants under the Prevention of Corruption Act.
The kidnappers demanded an additional 176 BTC along with ₹32 crore (approximately $3.6 million) in cash, but the handover was not completed due to the suspicion of the courier assigned to deliver the money. Bhatt was held at gunpoint and compelled to sell 34 Bitcoin (BTC), valued at around $150,000 at the time, to his captors.
The case of Bhatt's alleged involvement in another crypto kidnapping is separate from the previous case where he was the victim. In August 2024, Bhatt was arrested by India's Enforcement Directorate on charges of kidnapping and money laundering in relation to this second case. The investigation into his role in this crypto kidnapping is ongoing.
The risks associated with digital asset holdings, such as cryptocurrencies, have become more pronounced due to the increasing prevalence of crypto kidnapping. Crypto kidnapping has become more prevalent recently, with Bitcoin's record highs being a potential factor increasing the risk for digital asset holders.
BitConnect is a cryptocurrency platform that was involved in the second crypto kidnapping case, where two of its promoters were abducted. The details of the extortion in this case are yet to be fully disclosed.
The verdict in Bhatt's kidnapping case emphasizes the challenges law enforcement faces in keeping pace with evolving financial technologies. As digital assets continue to grow in popularity, it is crucial that law enforcement agencies adapt and evolve to combat the rising threats posed by crypto kidnapping and other related crimes.
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