Bitcoin News Today: Life for Ex-MLA and Police in Bitcoin Extortion Scandal Signals Judicial Warning

In a landmark ruling, an Indian anti-corruption court has sentenced 14 individuals—including a former legislator and 11 police officials—to life imprisonment in a high-profile 2018 case involving the kidnapping of a businessman to extort Bitcoin. The court in Ahmedabad found the group guilty of criminal conspiracy, kidnapping for ransom, illegal detention, and assault under the Indian Penal Code (IPC) and the Prevention of Corruption Act. Among those convicted are ex-BJP MLA Nalin Kotadiya and former Amreli district superintendent of police Jagdish Patel, an ex-IPS officer. The judgment, delivered by Special Judge B.B. Jadav, emphasized the need to curb corruption involving public servants and private individuals through decisive judicial action [1].

The case centers around Surat businessman Shailesh Bhatt, who had previously invested in an Rs 8,000-crore firm that abruptly collapsed. Bhatt reportedly recovered 752 Bitcoin from an associate, Dhaval Mavani, who was linked to a failed cryptocurrency venture. Upon learning of this, Kotadiya and senior police officers in Amreli allegedly conspired to abduct Bhatt in February 2018, illegally detaining him at a location near Gandhinagar. During the kidnapping, Bhatt was beaten and intimidated into confessing to having transferred part of the cryptocurrency to an associate, Kirit Paladiya, and selling others for Rs 44 crore. The kidnappers released Bhatt only after he agreed to transfer 176 Bitcoin and Rs 32 crore. When this agreement did not materialize, they forced him to sell 34 Bitcoin from Paladiya's wallet, extorting an additional Rs 1.32 crore [1].

Following the incident, Bhatt filed a complaint with the Union home ministry, leading to a Central Investigation Department (CID) inquiry and the arrest of 15 individuals. The trial, led by special public prosecutor Amit Patel, heard testimony from 173 witnesses, though 92 of them were found to have given false evidence. The court issued perjury notices to 25 of these witnesses, citing their deliberate attempts to obstruct the judicial process. In a statement, the court emphasized that such behavior undermined public trust in the judicial system and must be addressed to maintain the integrity of the legal process. The accused were also fined and ordered to pay for the costs associated with the trial [1].

The judgment has sparked broader discussions on the misuse of public office for personal gain and the role of cryptocurrency in facilitating high-stakes extortion. The court confiscated gold ornaments recovered from the Amreli SP and ordered their transfer to the Master of Mint in Mumbai. Meanwhile, a parallel investigation by the Enforcement Directorate (ED) continues against Bhatt for alleged money laundering, as well as a pending case in a CBI court involving Bhatt’s business partner, Kirit Paladiya, and a CBI inspector [1].

This case underscores the growing intersection between traditional criminal conduct and digital assets. With cryptocurrencies increasingly used in financial crimes, law enforcement agencies in India and beyond are facing new challenges in tracing and prosecuting such offenses. The sentencing reflects a strong judicial stance against corruption and criminal collusion within public institutions, sending a clear message to potential offenders [3].

Source:

[1] Bitcoin extortion case: Ex-BJP MLA, ex-SP among 14 ... (https://timesofindia.indiatimes.com/city/ahmedabad/bitcoin-extortion-case-ex-bjp-mla-ex-sp-among-14-handed-life/articleshow/123591797.cms)

[2] Indian Court Sentences 14 to Life in Bitcoin Extortion Case (https://cointelegraph.com/news/indian-court-sentences-14-bitcoin-extortion-case)