First case of Bitcoin fraud in India: Rogue Indian agents caught stealing Bitcoin

An investigator with India’s Narcotics Control Bureau (NCB) has been accused of stealing about 470 bitcoins (currently worth about $571,000) that were confiscated and frozen during a drug bust in 2015.

(Indian Narcotics Control Bureau investigator accused of stealing Bitcoin source: Golden Finance)

One of India’s Narcotics Control Bureau (NAB), essentially the US equivalent of the DEA, is said to have forged a document to cash out frozen Bitcoins during a previous drug raid. The case is similar to that of DEA agent Carl Force, who pleaded guilty to theft and extortion of Silk Road founder Ross Ulbricht during a raid on the Silk Road marketplace. Notably, local media reports said the case was the first instance of Bitcoin fraud in India.
The defendant, Satyendra Kumar Singh, was part of a bust in mid-2015 targeting a group of psychotropic drugs, primarily a banned antidepressant and stimulant, that were likely delivered to U.S. customers through dark web drug markets.
In June 2015, Singh froze nine Bitcoin accounts of drug dealers. The frozen accounts contained a total of 470 Bitcoins, which were worth $110,000 at the time.
A year later, when the Narcotics Control Bureau checked the status of the accounts, it discovered that they had been unlocked and cashed out by Singh. An internal investigation was launched.
Speaking to The Times of India, a Crime Branch official involved in the investigation said:

“After the accused was released on bail from the Gujarat Supreme Court in 2016, the NCB sought status reports of the Bitcoin accounts and came to know that Singh had authorized the unfreezing of these accounts in July 2016 through a letter written on NCB letterhead and signed and stamped. Singh came under scrutiny for stealing Bitcoins without authorization and an internal investigation was launched against him.”

The investigation revealed that Singh had colluded with a drug dealer who was also one of the accused to forge official documents to unfreeze a Bitcoin account of an unknown Bitcoin exchange. Once unfrozen, the Bitcoin was converted into legal cash and then transferred to other accounts.
In this case, Singh took half of 470 bitcoins, which were worth $280 each in July 2016 and are now worth $1,200 each.
Singh has been suspended and arrested by the NCB. Investigations into the misappropriation of bitcoin transactions and Singh’s role in the case are ongoing.