Cryptocurrency dealing not offence under OPID Act: Orissa HC

CUTTACK: In a significant ruling, the Orissa High Court has held that crypto currency is not money as per Prize Chits and Money Circulation Schemes (Banning) Act and investments made by public in it cannot partake the nature of deposit within the meaning of Odisha Protection of Interests of Depositors (in Financial Establishments) Act.

The single judge bench of Justice Sasikanta Mishra gave the ruling while granting bail to two persons accused of duping people of their hard-earned money by operating a ponzi/multi-level marketing (MLM) scheme in the name of a fake crypto currency company. “Mere dealing in crypto currency cannot be treated as illegal in any manner. Hence, it cannot be treated as offence under the OPID Act,” Justice Mishra ruled.

The accused were allegedly involved in targeting private individuals and luring them to invest in crypto currency – Yes World Token by creating a trust wallet for getting higher returns by building a network of members. Then investors were asked to add further members on payment of interest or bonus which is expected to increase corresponding to the number of members added by them.

“The accused can only be said to have attempted to convince members of the public to trade in crypto currency – Yes World Token. There is nothing on record to show that they had dishonestly induced any person to deliver any property to them. In other words, there is no evidence whatsoever of any money being transferred from any person to the accused. The methodology adopted being person to platform, it cannot be said that the accused had cheated any person particularly in view of the fact that any amount invested by any person remains secure in his or her trust wallet”, Justice Mishra observed.

The judge further said, “Thus, the offence under section 420 does not appear, prima facie, to be made out. There is no evidence that any documents, records etc. were forged, manipulated, manufactured etc. so as to attract the offences under section 467/468/471 of IPC.”

A crypto currency is a digital currency, which is an alternative form of payment created using encryption algorithms. The use of encryption technologies means that crypto currencies function both as a currency and as a virtual accounting system. To use crypto currencies, one needs a crypto currency wallet.