Indian court hands life sentences to 14 in 2018 Bitcoin extortion case
An Indian anti-corruption court has sentenced 14 people, including 11 police officers and a former Bharatiya Janata Party (BJP) legislator, to life imprisonment for their roles in the 2018 kidnapping and extortion of a Surat-based businessman who had recovered cryptocurrency. The court found the accused guilty of criminal conspiracy, kidnapping for ransom, illegal detention and assault, and held several officers liable under anti-corruption statutes.
The case centers on businessman Shailesh Bhatt, who reportedly recovered a portion of his investment from Dhaval Mavani, a developer associated with the collapsed BitConnect scheme. Investigators say Bhatt had recovered hundreds of Bitcoin and that some coins were stored with an associate, Kirit Paladiya.
According to the prosecution, senior local officials and a former MLA conspired after learning Bhatt had regained crypto assets. On Feb. 11, 2018, Bhatt was abducted and held at Keshav Farm near Gandhinagar, where he was beaten and coerced into admitting details about the recovered Bitcoin. The kidnapping was led by Amreli local crime branch personnel and involved multiple police officers.
Bhatt was released only after being pressured to hand over part of his crypto holdings and $3.6 million in cash. When the initial arrangement collapsed, the accused forced the sale of 34 Bitcoin from Paladiya’s wallet, an action the prosecution says produced roughly $150,000 in extorted funds.
The victim’s complaint to the Union home ministry triggered a criminal investigation that resulted in the arrest of 15 people and a lengthy trial in which the prosecution called 173 witnesses. Among those convicted are former Amreli district superintendent of police Jagdish Patel and former MLA Nalin Kotadiya. The court also ordered the confiscation of gold ornaments recovered from the former superintendent; those assets are to be transferred to the Master of Mint in Mumbai.
The verdict marks a high-profile example of alleged collusion between elected officials and law-enforcement personnel to seize cryptocurrency assets recovered by a private investor. Authorities continue to investigate related transnational money-laundering activity connected with crypto-to-gold conversions that have surfaced in other enforcement actions in the region.
