As cryptocurrencies gain acceptance among Indian investors, fraud related to these digital assets is becoming a growing concern. The adverse effects of digital assets have once again come to light in a recent case by the Delhi High Court.
The Delhi High Court has expressed strong concerns over the potential misuse of cryptocurrency, stating that it could lead to the "dissolution of recognised money into the dark, unknown and untraceable money." Umesh Verma, a businessman accused of a multi-victim cryptocurrency scheme involving Dubai-based Pluto Exchange, was denied bail at the time of the observation.
According to a PTI report, Justice Girish Kathpalia observed that the allegations against the accused were serious, particularly due to the broader economic impact of cryptocurrency. The court stated that dealing in cryptocurrency has "profound implications on the economy" and highlighted its potential to convert recognised money into untraceable funds.
Verma, who was taken into custody in December 2020 and later released on interim bail, is accused of cheating 61 investors by assuring them returns between 20 per cent and 30 per cent on cryptocurrency investments. The court observed that even after crypto assets were derecognised, Verma continued to collect funds, painting a "rosy picture" of guaranteed high returns.
Justice Kathpalia added that Verma's previous criminal record further weakened his bail plea. The accused is reportedly involved in at least 13 similar cases, raising concerns about a potential flight risk. The court ordered him to surrender before the investigating officer or the trial court without delay.
The regulatory framework for cryptocurrency in India remains unclear, drawing increasing legal and judicial attention. In May, the Supreme Court previously expressed concerns over the government's prolonged delay in establishing precise rules for the industry. Also, several cases of cryptocurrency-related fraud have emerged across the country.
The High Court's decision broadens the body of legal precedents, highlighting the complex issues presented by unregulated cryptocurrency activity in India.
