Police Officers Charged in $1.3 Million Bitcoin Extortion Scheme

The Crime Investigation Department in the Indian state of Gujurat has accused 10 police officers of kidnapping, attempted extortion and corruption after they allegedly abducted a businessman and forced him to hand over 200 bitcoins.

Gujurat's CID branch filed a First Information Report - the initial step in conducting a police inquiry in India - against 10 officials and a civilian "Fixer" on Sunday, the Times of India reported.

The accused include nine constables and a local town's police inspector, whose name is reportedly Anant Patel.

The police officials are accused of kidnapping local residents Shailesh Bhatt, Kirit Paladiya and a driver referred to as Mahipal, taking them to a farmhouse, beating them and forcing them to transfer the bitcoins, according to a separate report from the Ahmedabad Mirror.

The amount involved is equal to roughly $1.3 million at current prices.

The Mirror further reported that Bhatt was forced to pay another third party to retrieve his bitcoins.

Director-general of police Ashish Bhatia said an initial probe could not verify that the 200 bitcoins were actually transferred from Bhatt to Patel, and police would examine both citizens' wallets for proof, according to the Times.

"In his application, Shailesh Bhatt had mentioned the transfer of 200 Bitcoins worth Rs 12 crore from the digital wallet of his business partner, Kirit Paladiya. Another Rs 32 crore were allegedly paid for their release from a farmhouse. Later, Rs 78.5 lakh were allegedly paid to get the Bitcoins back. All these transactions mentioned in the application could not be proven."

A Special Investigative Team is being formed to fully investigate the matter, Bhatia said.

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