Indian government officials nabbed in massive bitcoin money laundering scheme
By Ethan Huff // Jul 12, 2018

A senior official from the Indian National Congress (INC), one of India's opposition parties, is demanding an investigative probe into what he's calling a "mega bitcoin scam" involving leaders of the country's majority Bharatiya Janata Party (BJP).


Shaktisinh Gohil says that BJP officials have been complicit in a "multi-layered" scam that involved laundering large amounts of money through the bitcoin platform. According to the Criminal Investigation Department (CID), roughly Rs 5,000 crore, the equivalent of about $723 million, was funneled through bitcoin as "cover-up" money for various laundering and extortion purposes.

All of this came to light back in April when Indian businessman and builder Sailesh Bhatt filed a complaint against Gujarat's Amreli district police, claiming that they extorted 200 bitcoins, worth about $2 million at the time, as well as demanded Rs 32 crore, worth about $4.6 million in cash, as ransom money.

According to Bhatt, Nalin Kotadiya, a BJP official and former Member of the Legislative Assembly (MLA), pressured him to hand over all of this cash and bitcoins under duress. A CID investigation was launched immediately after, resulting in multiple arrests, including Amreli district police superintendent Jagdish Patel.

Kotadiya reportedly absconded not long after, at the request of CID, and has since been declared a proclaimed offender. Despite a warrant being issued for his arrest, CID insists that Kotadiya has "remained untraceable," which Gohil says is all too convenient, seeing as how the Modi government has basically turned a blind eye to the whole thing.

"If he is arrested, [Kotadiya] will reveal damning evidences which will expose top BJP leaders in the state," Gohil says.

"It is intriguing that the Modi government sends ... authorities to hound Gujarat Congress MLAs as well as Karnatak Congress candidates during elections when the code of conduct is on. But it does not bother to investigate this 'mega bitcoin scam,'" he adds.

For more bitcoin news, check out

Indian officials not investigating bitcoin scam because they want to "protect themselves," says congressional committee

Commenting on the matter in a recent tweet, the Gujarat Pradesh Congress Committee stated that the reason the Indian government isn't performing due diligence in getting to the bottom of the matter is that it's trying to protect itself rather than seek justice.

"Modi says a lot about 'na khaunga, na khane dunga', yet his govt is not investigating this mega Bitcoin scam," the tweet reads. "Are they not investigating so they can protect themselves?? Why are they keeping the people of India in dark about such a huge scam?!"

Bitcoin fraud is also a problem here in the United States, where the Department of Justice (DOJ) is currently investigating allegations of "spoofing," wash trading, and various other scams said to be taking place on legitimate bitcoin trading platforms.

Spoofing involves savvy traders submitting a whole bunch of bitcoin orders all at once, only to cancel them after prices have moved in a pre-determined direction, of course benefiting the spoofers. Wash trading is a situation in which traders basically trade with themselves, creating fraudulent demand in order to manipulate prices.

The Street also warns about a number of other scams, one of which is known as "pump and dump." It basically involves investors hyping, or "pumping," up a cryptocurrency in order to significantly increase its value. They then cash out, or "dump," their coins, raking in all the benefits at the expense of those who were tricked into jumping onboard.

"With the inevitable rise of bitcoin in current and coming years, it is becoming increasingly important to understand and be on the lookout for bitcoin scams that could cost you thousands," warns Anne Sraders from The Street.

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