Investigators observed that a specific account’s altcoins were dumped and converted into Bitcoin, which moved toward overseas exchanges. The authorities detected a pattern suggesting the Bitcoin would be moved offshore after the conversions, and 22 Bitcoins remained in the account as some trades were blocked. Because the owner claimed the coins were not theirs, the police seized the Bitcoin by ex parte submission, but the coins were stored in a cold wallet owned by the investigating firm and the mnemonic code was not handed over.
A former detective involved in the case was later jailed on bribery charges, and the firm requesting the inquiry allegedly offered bribes to influence the investigation. Internal guidance from five years earlier required seized virtual assets to be moved to a police-managed wallet for safekeeping, and the 2022 Integrated Evidence Handling Guideline further mandated that police hard wallets be used when only a physical hard wallet is seized. Police have since initiated improvements to the seizure and custody system, including a plan to manage seized virtual assets through preparation, seizure, custody, and transfer phases across all police stations.
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