- Court denies bail in crypto scam threatening India’s financial system.
- Accused continued raising funds despite multiple fraud complaints and warnings.
- Investigation reveals 61 victims and losses nearing ₹50 lakh total.
The Delhi High Court has rejected the bail plea of businessman Umesh Verma, who is accused of running a fraudulent cryptocurrency investment scheme. The court expressed concern that such activities could damage the country’s financial structure by turning legal funds into untraceable assets.
Justice Girish Kathpalia ruled that crypto-related fraud carries serious risks to economic stability. He described the case as involving a deliberate misuse of investor trust and financial resources.
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Investor Complaints Reveal Widespread Losses
Verma, founder of the Dubai-based Pluto Exchange, was arrested in December 2020 after investor Joginder Kumar filed a complaint. Kumar stated that he was promised monthly returns of up to 30 percent on a ₹5 lakh investment.
According to investigations by the Economic Offences Wing, Verma defrauded at least 61 investors representing different states. The combined losses reported were almost ₹50 lakh, and later in the year, despite regulatory warnings, Verma persisted in collecting money from unsuspecting individuals.
The court noted that Verma had a history of 13 convictions for committing similar fraud. It also added that he was not able to honor mediation agreements and continued to mislead individuals even when crypto schemes lost recognition among authorities.
Court Finds Pattern of Deception in Crypto Dealings
Verma argued that his business failed due to changing policies and that he had no fraudulent intent. He also said that he had paid many investors’ claims. Nonetheless, the court concluded that he was clearly doing it with the intention of cheating and controlling investors.
According to the judge, Verma utilized his financial means to lengthen the fraud scheme. His continued operation even after being under the spotlight revealed his defiance of the law and the regulatory systems.
India’s Legal and Regulatory Pressure on Crypto Fraud
India has introduced strict measures to control crypto-related transactions in recent years. A new tax regime was announced following the Supreme Court’s 2020 reversal of the 2018 Reserve Bank ban. This regime involved a 30 percent tax on gains and a one percent deduction on high-value transfers.
In 2023, the government included crypto transactions in the Prevention of Money Laundering Act. Courts have repeatedly challenged legislatures to develop a transparent regulatory framework to curb the industry’s increasing fraud rate.
Conclusion
The court’s decision to deny bail reinforces the judiciary’s position against crypto-based fraud. As scams increase, the call for stronger oversight and investor protection continues to gain urgency.
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