Zebpay Aids Indian Police After Bank Thieves Buy Bitcoin

By Stan Higgins

Indian bitcoin exchange Zebpay has had its bank account unfrozen following a state investigation into a bank theft, the startup said today.

Regional news service Pune Mirror reported earlier this week that criminals had exploited a bug that allowed them to steal hundreds of thousands of dollars from the state-owned Bank of Maharashtra. Those behind the heist then exchanged some of those funds for bitcoins through Zebpay.

In investigating the crime, police froze three bank accounts tied to the outgoing funds, including one owned by the exchange. According to the report, four individuals were ultimately identified as the alleged culprits, all residents of the city of Buldhana.

When contacted by CoinDesk, Zebpay co-founder Sandeep Goenka said that the bug had allowed the hackers to spend more money than was actually held in the affected accounts, some of which was used to buy bitcoins with the exchange.

The startup had cooperated with the investigation into the theft, he explained, adding that “operations were normal during this period and none of our users were affected”.

Goenka told CoinDesk:

“Zebpay helped the Pune Cyber Crime department to get back the bitcoins purchased by the accused. This was possible because we follow KYC for all users. The Cyber Crime office then gave orders to sell the bitcoins to recover the money. These bitcoins were also sold on Zebpay.”

According to the co-founder, the court has already given orders to unfreeze the exchange’s bank account and the “matter is now closed”.

Zebpay, founded in 2012, raised $1m in a Series A funding round in early 2016.

Via: http://www.coindesk.com/zebpay-aids-indian-police-after-bank-thieves-buy-bitcoin/

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