New Delhi | In a significant ruling on organised cybercrime involving digital assets, the Delhi High Court has denied anticipatory bail to a man accused in a cryptocurrency fraud case involving transactions worth around ₹1 crore. The court observed that the matter prima facie appears to be part of a structured cyber fraud operation, requiring custodial interrogation for a detailed investigation.
The case pertains to allegations that the accused, identified as Gaurav, induced the complainant into transferring cryptocurrency worth approximately ₹1 crore in USDT (Tether) under the pretext of investment opportunities and profitable returns. The complaint states that the accused initially approached the victim through a common acquaintance in 2024 and later persuaded him to invest in digital currency schemes.
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According to the prosecution, the complainant transferred USDT 111,247—equivalent to nearly ₹1 crore—from his crypto wallet to a wallet allegedly controlled by the accused. Investigators further claim that a portion of the funds was retained, while the remaining amount was transferred to associates, including a co-accused, suggesting coordinated movement of proceeds of crime.
The FIR in the matter was registered by Delhi Police in 2025 on charges including cheating, criminal breach of trust and criminal conspiracy. The accused, however, denied wrongdoing and claimed he was merely acting as an intermediary between the complainant and other individuals based in Kochi, arguing that he had been falsely implicated in the case.
While hearing the anticipatory bail plea, Justice Swarana Kanta Sharma observed that joining the investigation does not automatically entitle an accused to pre-arrest bail, especially in cases where deeper financial tracing and digital recovery mechanisms are required. The court emphasised that custodial interrogation was necessary to trace cryptocurrency wallets and identify the full chain of transactions.
The court also noted that digital currency transactions, by their nature, often involve anonymity and cross-border movement, making investigation complex without direct custody of the accused. It observed that access to digital wallets and associated credentials is crucial to trace the flow of funds and identify additional beneficiaries in such cases.
During the proceedings, it was highlighted that the alleged co-accused used encrypted communication channels, including WhatsApp calls and VPN-based systems, to conceal identities and locations. The court took note of these technical factors, stating that assistance from the accused may be essential to identify other members of the alleged network.
In its observations, the court stated that the case appears to involve a broader organised cyber fraud racket operating through digital platforms, encrypted communication applications and cryptocurrency wallets that do not require traditional KYC verification. It held that such circumstances require detailed and sustained investigation to uncover the full extent of the alleged conspiracy.
The court further expressed concern over the possibility of the accused absconding and the remaining proceeds of crime yet to be recovered. It noted that granting anticipatory bail at this stage could hamper both recovery efforts and the progress of investigation.
The judgment also referred to the larger pattern of cyber fraud cases emerging across the country, where victims are allegedly lured through investment promises and high-return schemes linked to digital assets. Experts have repeatedly warned that the anonymity and decentralised nature of cryptocurrencies can be misused for fraudulent activities if not properly regulated and traced.
Considering the seriousness of allegations and the need for effective investigation, the court concluded that there was no ground to grant anticipatory bail. The application was accordingly dismissed, allowing investigators to proceed with custodial interrogation as required under law.
With the case now moving forward, investigators are expected to focus on tracing cryptocurrency flows, identifying additional suspects, and mapping the alleged network involved in the transaction chain. The outcome is likely to contribute to ongoing legal precedents regarding the handling of cyber fraud cases involving digital currencies in India.
