Rs. 290M crypto scam: Court warns funds leaving Sri Lanka through Cryptocurrency

Court calls for public awareness and tighter controls  

Magistrate notes that the Criminal Investigation Department and the Central Bank should take necessary steps to raise public awareness regarding such financial frauds and implement a proper mechanism to address the issue   

The case was ordered to be called again on May 15   

By Bhagya Silva

Colombo Chief Magistrate Asanga S. Bodagamage observed that due to loopholes in actions carried out by state financial institutions under the Foreign Exchange Act, money in Sri Lanka is being transferred overseas through cryptocurrency transactions.   

Accordingly, the Magistrate stated that immediate steps should be taken to prevent such activities and to educate the public and directed that the Central Bank of Sri Lanka be informed in this regard.   

The Magistrate further observed that cryptocurrency transactions carried out using modern technology without any approval from the Central Bank of Sri Lanka have taken place without the public having adequate awareness about such activities. The court also noted that incidents of this nature are increasingly being reported before courts. 

The Magistrate stated that investigations into such incidents appear to be limited to court proceedings alone and emphasized that the Central Bank being the main financial regulatory authority of the country along with other relevant institutions, should take appropriate measures and educate the public for the welfare of the people and the country.   

The Magistrate further noted that the Criminal Investigation Department and the Central Bank should take necessary steps to raise public awareness regarding such financial frauds and implement a proper mechanism to address the issue.   

The court also observed that many individuals have taken advantage of loopholes in the Foreign Exchange Act and related procedures to commit financial fraud and that the Central Bank should take necessary steps after being made aware of these matters.   

The Magistrate made these observations when the case related to an alleged Rs. 290 million fraud at a well known private bank was taken up before court today. The suspects in the case are alleged to have fraudulently obtained money belonging to the public through cryptocurrency transactions using Binance accounts.   

The Magistrate also directed the Criminal Investigation Department to expedite investigations into the incident involving the disappearance of Rs. 290 million and report progress to court.   

The court further observed that this was not an ordinary incident and instructed the CID to take prompt action to prevent similar frauds carried out through Binance platforms.   

Making further observations, the Magistrate stated that for the past three months the suspects have been produced before court in connection with this incident and that investigations should be completed promptly by gathering all relevant information relating to the case.   

The Magistrate also previously observed that this was not a minor offence such as ordinary theft, but a serious matter involving the fraudulent misappropriation of public funds through Binance accounts and stressed that the CID should take swift action to prevent such crimes.   

Nineteen suspects connected to the incident had earlier been remanded and later released on bail.   

The case was ordered to be called again on May 15.