Orissa High Court Denies Quash of Proceedings in Cryptocurrency Fraud Case
The Orissa High Court has made a pivotal ruling in a case involving alleged cryptocurrency fraud, emphasizing that while trading in cryptocurrencies may be legal, it does not provide immunity to those accused of using it to deceive investors. This ruling was articulated in the case titled Umesh Kumar Ramani Vs State of Odisha, presided over by Justice Sanjeeb K Panigrahi.
Justice Panigrahi focused on determining whether the accused exploited the “facade of cryptocurrency trading” to lure investors with false promises, sham entities, and a non-existent digital currency. The Court observed, “The law does not extend immunity to deceit merely because the medium through which such deceit is practiced is not itself prohibited.”
The case arose from a complaint filed in November 2024, alleging that the accused defrauded an investor of ₹13,540 by setting up an account under the name MVC (My Victory Club). According to the prosecution, the accused established a fictitious company, Digi Mudra Connect Pvt Ltd, and promoted a digital coin named SIITO, misleading investors into believing it would be listed on major exchanges like Binance.
Furthermore, it was claimed that funds were amassed through bank accounts and digital payment platforms like Google Pay and PhonePe, linked to the accused. The State expanded the allegations, asserting that over ₹5 crore had been collected from various investors across multiple districts. Additionally, one of the accused purportedly earned a commission of ₹1.5 crore, acquiring assets from these proceeds.
In defense, the accused contended they were merely agents promoting cryptocurrency investments on the directive of higher company officials. They argued that investors willingly entered the market with awareness of the risks and should not resort to criminal law solely due to financial losses. They also cited legal precedents acknowledging cryptocurrency as a virtual digital asset.
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However, the Court dismissed these arguments at the stage of quashing proceedings. It clarified that the prosecution was not predicated on the mere promotion or trading of cryptocurrency. Instead, the focus was on the use of cryptocurrency as a tool for defrauding investors and collecting their money.
The Court underscored that even a legally permissible business could incur criminal liability if used as a facade for fraudulent practices. It further stated that economic offenses undermine public trust in financial systems and must be treated with gravity.
The determination of whether the accused acted merely as agents or were active conspirators was deemed a disputed fact, necessitating thorough examination of financial transactions, electronic evidence, witness testimonies, and circumstantial evidence during trial proceedings.
Advocate Soumya Ranjan Das represented the petitioners, while Additional Standing Counsel Sarita Moharana appeared for the State.
For further details, refer to the official judgment document.
