Kochi/ Kozhikode: For the past couple of years, cryptocurrency traders have been raising allegations of police corruption, of how investigating officers demand bribes to clear their names from online cheating cases in which they had no role.
If the traders refuse to pay up, their bank accounts are frozen, indefinitely, and sometimes they are arrested and remanded in custody.
Now for the first time, Kerala Police took into custody four officers of Karnataka Police for extortion after they allegedly took Rs 4 lakh from two Kochi-based cryptocurrency traders to let them off in an online cheating case.
Kochi's Kalamassery Police took into custody Inspector Shivaprakash, constables Shivanna, Vijaya Kumar, and Sandesh of Bengaluru's Whitefield CEN Crime Police Station Wednesday evening.
"Kalamassery police found Rs 3.95 lakh in their car. The officers could not explain the source of money and so they were brought to the station," said Kochi Deputy Commissioner of Police (Law & Order and Traffic) S Sasidharan.
The four officers of Karnataka Police have been charged with extortion (Section 384 of the IPC) and threatening to extort money (Section 385 of the IPC), he said.
Since the punishment for the offences is less than seven years in prison, they were served notice under Section 41B of the IPC and let go, Kalamassery Station House Officer - Inspector Vipin Das, who took the four officers into custody.
DCP Sasidharan said the team of four officers from Whitefield Police Station Came to Kochi on Tuesday, August 1, as part of an investigation into an online fraud case.
A woman in Bengaluru lost Rs 26 lakh to a fraud that promised a return of 30% in five days, said Inspector Das. "If a person invest Rs 100, they were promised to get Rs 130 on the fifth day; if they invest Rs 1,000, they were promised Rs 1,300. It is a scam," he said.
Whitefield Police registered a case on the woman's complaint. Inspector Shivaprakash, who is the investigating officer of the cybercrime, picked up two persons in Bengaluru. Their questioning led the inspector and his team to Akhil Antony and Nikhil, two cryptocurrency traders in Kochi.
"Often, online fraudsters convert their ill-gotten rupees to cryptocurrencies," said Vipin Das.
Cryptocurrency traders say police conveniently target them even though their trading activities are transparent and legal. "Trading in cryptocurrency is just like buying or selling any product online. We sell Tether (USDT) to any verified buyer on trading platforms. The money we get in our account is in exchange for the equivalent USDT we sold to the buyer on a crypto exchange. We have documents to prove it," said Abdul Jabbar V H, a cyber activist who represents several victims of indiscriminate bank account freezes in Kerala.
The Karnataka Police team picked up Akhil Antony and Nikhil around 4 pm on Tuesday, August 1, said their lawyer Suchithra M S. "They were taken to Palluruthy Police Station and then taken into custody. When we reached Palluruthy station and checked the documents, we found that their names were not mentioned in the original FIR," said the lawyer.
Soon, Akhil and Nikhil's families got a call from the Karnataka Police officers demanding Rs 10 lakh to free them and give a clean chit in the cheating case, said Suchithra. "We rushed to the DCP's office and filed a missing person's complaint," she said.
On the night of August 1, the officers and the two young men stayed in a hotel in Thrissur.
On August 2, Nikhil's father arranged Rs 3 lakh and gave it to the Karnataka police officers, Suchithra. The officers also forced Akhil to withdraw Rs 1 lakh from ATM, she said.
Around the same time, DCP Sasidharan was also working on the missing person complaint. "The complainant made me listen to the phone conversation with the officers and I found some truth in the complaint," he told media.
The DCP immediately asked Kalamassery SHO Vipin Das to intercept the vehicle of the Karnataka police team. "Our officers stopped the vehicle at Nedumbassery and found four Karnataka officers inside. Akhil was also with them. We searched the car and found Rs 3.95 lakh," he said.
The four Karnataka Police officers were taken into custody after they failed to explain the source of the money, he said.
Freeze and Fleece exposed
Onmanorama had done a series of stories on how police officers, mostly from Telangana, Delhi, Karnataka, and Gujarat, freeze bank accounts of third party over online frauds and demand bribes to unfreeze the accounts.
On February 22, Nizar of Manarcadu in Palakkad district mistakenly received Rs 60,000 in his mobile payment app from Ashirwad Goswami, a resident of Bengaluru.
Nizar immediately reported it to his bank; and Goswami reported the loss of money to Bengaluru's South East Cybercrime, Economic Offences and Narcotics (CEN) Police Station in HSR Layout.
Ten days later on February 26, Nizar's bank (Central Bank of India) froze his account at the request of South East Police.
On May 3, Nizar transferred the Rs 60,000 back to Goswami, and Goswami gave a written statement to the police saying he had no complaint against Nizar. "Yet, the South East Police have not yet lifted the freeze on the account," said Jabbar.
The investigating officers saw Rs 5 lakh in Nizar's account and demanded Rs 2.5 lakh to lift the freeze, he said. "They reduced it to Rs 1 lakh. But we decided not to give a single paisa as a bribe," he said.
Three months after returning the money, Nizar's account is still frozen.
Last month, Hyderabad police arrested a single mother of three children in Thrissur's Chelakkara small in connection with a cybercrime. The woman, a lab technician dabbles in crypto trading.
According to the original complaint, Fareed Khan of Kalapathar in Hyderabad lost Rs 58.5 lakh to an online trading fraud. He had deposited the money to eight accounts to buy USDT or Tether, a less volatile digital currency pegged to the dollar.
In his complaint, Fareed had mentioned the account numbers to which he transferred the money. "But Hyderabad police did not arrest them but came to Chelakkara to arrest the woman because the fraudsters used some proceeds of the crime to buy USDT from her," said Jabbar, the cyber activist.
According to police, around Rs 13 lakh worth of USDT was bought from the woman. "But instead of investigating the crime, the police demanded Rs 40 lakh from her to free her from the case," he said.
She refused because she did not have money. "They arrested her. Her three children kept crying and asked me to help her," he said.
She got bail on the condition that she should go to the police station twice a week. "It is an expensive condition but we had no choice," he said.
Moving the Supreme Court
The All India Virtual Asset Traders' Association, a group of small-time cryptocurrency traders, said they are moving the Supreme Court to seek direction to police to not take punitive action against third-party traders in cyber crimes. The association has sounded out to its members to pitch in money to foot the legal cost. The association said it will demand strict guidelines on freezing bank accounts, freezing disputed money, and arresting third-party crypto traders.
