HC denies bail to man in cryptocurrency duping case

At least 47 investors were lured on the assurance of high returns

The Delhi High Court on Tuesday rejected the bail application of a man, who launched his own cryptocurrency, for duping over 47 people to the tune of ₹2.5 crore by inducing them to invest in the cryptocurrency on the assurance of high returns up to 20%-30% per month.

Justice Anu Malhotra said that the allegation levelled against Umesh Verma relates to commission of an economic offence which “corrodes the fabric of democracy and is committed with total disregard to the rights and interest of the nation”.

The High Court said that Mr. Verma allegedly duped a large number of innocent investors of their hard-earned money, and hence, was not appropriate to be granted bail.

As per the complaint filed at the Economic Offences Wing (EOW), Crime Branch, Delhi Police, Mr. Verma along with his accomplice ran a cryptocurrency chit fund company in the name of Pluto Exchange at Connaught Place.

Fled to Dubai

One of the investors, who got duped by the firm, claimed that he had invested around ₹5 lakh but did not receive returns on his investments as assured by the accused. Later, he and other investors got to know that the accused shut their office and fled to Dubai.

After an FIR was lodged, the EOW investigation revealed that over 47 investors had given similar complaints against Mr. Verma and his cryptocurrency firm and a total of ₹2.5 crore was allegedly involved. The investors used to send their money through bank transfer, and in many case, by cash.

Mr. Verma had reportedly left India and was residing in Dubai when the investigation began. After an LOC (look out circular) was opened, he was apprehended at the IGI Airport, when he came from Dubai to India on December 30, 2020.

In his defence, Mr. Verma contended that the events relate to the year 2018 when the Reserve Bank of India had issued a circular debarring all financial institutions from lending any financial support or providing services to persons dealing with or settling virtual currencies/ cryptocurrency which led to the downfall in the trading market. This, Mr. Verma, said was the cause for the loss of investment which resulted in the closure of his business.

Mr. Verma said that the investors had willingly and voluntarily participated in the trading of cryptocurrency knowing fully well that it was a speculative trade that would have also resulted in losses, which ultimately happened and the investments were wiped off because of the market conditions.

The High Court, however, pointed out that Mr. Verma and his crypto firm continued to take investments even after the RBI’s circular of April 6, 2018.