Karnataka to procure advanced cryptocurrency investigation tool to tackle cybercrime

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Karnataka’s Criminal Investigation Department (CID) is moving to strengthen its capabilities against cryptocurrency-related crimes by procuring an advanced investigation tool designed to trace illicit funds, map entities, and disrupt criminal networks operating through digital currencies.

The initiative comes at a time when cybercrime is on the rise in Bengaluru, one of India’s fastest-growing tech hubs.

According to a recent Moneycontrol report, Bengaluru recorded 44,177 cybercrime cases between 2023 and October 31, 2025, resulting in estimated financial losses of Rs 4,143 crore for citizens. The rising sophistication of cybercriminals, particularly those leveraging cryptocurrencies to launder money, has created an urgent need for specialized investigative tools.

Also, read: Bengalureans lose over Rs 4,100 crore to cyber crime in 3 years, only 7 percent of the sum recovered

Saidulu Adavath, superintendent of police, cyber crime division, Karnataka CID, told Moneycontrol: “This is the first time we are procuring an advanced cryptocurrency investigation tool. Nowadays, most swindled money is transferred into cryptocurrency through multiple layers, making it extremely difficult to trace. We need to be equipped to tackle such frauds effectively and ensure that perpetrators cannot evade law enforcement by exploiting new technologies.”

The tender documents specify that the tool must support tracing across more than 24 blockchains, including major ones such as Bitcoin, Ethereum, Tether, BNB, Solana, XRP, USDC, and Dogecoin. These blockchains represent at least 95 percent of global cryptocurrency market capitalization. The solution is also expected to support cross-chain and multi-bridge tracing, automatic scanning of publicly available data, and real-time monitoring through web, mobile, and API platforms, providing investigators with comprehensive and immediate access to relevant information.

The tool must be capable of detailed intelligence gathering, including the identification of user geolocation, IP addresses, ISP details, TOR (The Onion Router) and VPN (Virtual Private Network) usage, wallet software versions, and associations with other wallets or crypto businesses. It will also conduct darknet market transaction analysis and generate automated alerts on suspicious transactions or activities.

Further, the solution is expected to support entity attribution and track the flow of funds through peer-to-peer (P2P) cryptocurrency exchanges, offering unlimited hop tracing of transactions across wallets, cryptocurrencies, and blockchains. It should enable investigators to visualise fund movements, uncover links to illicit activities such as scams, mixing services, narcotics trafficking, gambling, and terror financing, and include demixing capabilities for major cryptocurrency mixers like ChipMixer and Wasabi.

According to the tender, investigators should be able to generate comprehensive reports, timelines, and annotated graphs suitable for submission in courts. The solution is expected to follow auditable, deterministic methods to ensure legal admissibility of the evidence.

Additional features requested by the CID include seed-phrase recovery, Open-Source Intelligence (OSINT)-based lead generation, geolocation of wallet users, watchlists with email alerts, and a community hub for inter-agency collaboration. Vendors are required to integrate the solution with other databases via APIs and provide 30 hours of training, a three-year licence, 24/7 support, and specialist assistance for law enforcement personnel.

The tool is expected to include AI-powered analytics for pattern detection, risk scoring, typology identification, anomaly detection, and multi-language seed-phrase recovery covering formats such as BIP39, Monero, Shamir, and Electrum. The CID’s push to acquire such a tool reflects its commitment to modernising cybercrime investigations and enhancing Karnataka’s capacity to tackle sophisticated financial crimes in the rapidly evolving digital landscape.

Also, read: In a first, Karnataka police to deploy AI tools for fund trail analysis, dark web monitoring