Indian Legislator Pronounced Proclaimed Offender for Bitcoin Extortion

Before it entered the mainstream scene, Bitcoin was partly used by shady individuals and organizations to facilitate their operations. Now, even when the cryptocurrency has emerged from the dark web and become a household name, its dark past still clings to it.

Kidnapping, extortion, money-laundering – these are just some of the illegal activities that Bitcoin was tied to. Indeed, a former member of the Legislative Assembly in India is now on the run because of an extortion case filed against him by a businessman, Cointelegraph reported.

Nalin Kotadiya, the disgraced Indian representative, reportedly extorted $1.3 million worth of Bitcoin from victims Sailesh Bhatt and Kirit Paladia. According to Bhatt’s statement, Kotadiya kidnapped him and his business partner Paladia in February and detained them in a farmhouse until Paladia transferred the ransom demanded by the perpetrators.

Kotadiya was recently declared a proclaimed offender under Section 82 of India's Code of Criminal Procedure. Under the ruling, police officials are authorized to apprehend Kotadiya, confiscate his passport, and mandate him to appear before the court within 30 days.

While the kidnappers – who turned out to be policemen themselves – were apprehended following the investigation, Kotadiya remains at large. Bhatt claimed that Kotadiya is involved in the case as he was the one who coerced the businessman to transfer the cryptocurrency.

Virtual currencies are the preferred payment means by some criminals now as it’s fairly difficult to trace them, although not impossible. Last month, a South African teenager was kidnapped near his home by a gang, which then demanded 15 Bitcoin in exchange for the boy’s life. Police said that this may be the first case of crypto-related kidnapping in the country.

While criminals such as Kotadiya and the African gang chose to operate in such a way, others are moving in the crypto space itself, hacking their way through vulnerabilities in systems. Security firm Carbon Black recently released a report estimating that in the first half of 2018 alone, $1.1 billion worth of cryptocurrencies was stolen.