In a strong criticism of cryptocurrency dealings, the Delhi High Court has refused to grant bail to Umesh Verma, a businessman accused of cheating at least 61 people of over Rs 50 crore by promising them 20-30% monthly returns on cryptocurrency investments.
“Dealing in cryptocurrency has profound implications on (the) economy of our country by way of dissolution of recognised money into the dark, unknown, and untraceable money,” said Justice Girish Kathpalia in the July 14 order.
The court stated that Verma misused the mediation process to prolong his interim bail and continued to collect investments even after cryptocurrency was derecognized in India. It added that he poses a “serious flight risk” and has “deep pockets” that could influence witnesses.
The judge also noted that Verma is involved in 13 other similar fraud cases and had earlier fled to Dubai before being arrested at the airport on December 30, 2020.
Background
The case stems from a complaint filed by Joginder Kumar, who said Verma and others from Pluto Exchange lured him into investing Rs 5 lakh with the promise of high returns. When he didn’t receive the returns, he discovered that the accused had moved their office to Dubai and were unreachable.
The court had denied Verma’s bail earlier in 2021. It dismissed his fresh plea after finding that he had continued to defraud people and had failed to settle claims with most victims, despite receiving repeated opportunities.
The High Court made it clear that bail courts are not recovery forums and that economic crimes like this “constitute a class apart,” requiring a tougher approach.
Verma, currently on interim bail, has been ordered to surrender immediately.
India’s Uneasy Relationship With Cryptocurrencies
India has had a complicated and often uncertain relationship with cryptocurrencies. As early as 2013, the Reserve Bank of India (RBI) began issuing warnings to the public about the risks of investing in digital assets. These warnings continued until 2018, when the RBI formally prohibited banks and regulated entities from providing services related to cryptocurrencies. This effectively cut off cryptocurrency businesses from the traditional financial system.
However, in March 2020, the Supreme Court struck down this RBI ban, calling it a disproportionate response. The ruling revived cryptocurrency activity in the country, but concerns over investor safety and financial stability remained.
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In 2022, then RBI Governor Shaktikanta Das underlined the cryptocurrency threat to the country’s macroeconomic and financial stability, comparing them with Ponzi schemes. A few months later, Finance Minister Nirmala Sitharaman informed Parliament that the RBI wanted cryptocurrencies completely banned. Meanwhile, the government began taxing crypto income at a flat 30%, along with a 1% tax deduction at source (TDS) on large transactions, despite offering no regulatory clarity.
Cryptocurrency Remains Legal But Unregulated Despite Scrutiny
In March 2023, the government took a stricter stance by bringing cryptocurrency transactions under the Prevention of Money Laundering Act (PMLA), making it mandatory for cryptocurrency platforms to report suspicious activity and register with the Financial Intelligence Unit-India (FIU).
Despite these moves, there is still no official regulatory framework. In December 2024, the government said it had not set any timeline for regulation, arguing that cryptocurrencies are borderless and would need global cooperation to prevent regulatory loopholes.
More recently, in May 2025, the Supreme Court raised concerns over the lack of legal clarity. The bench questioned the central government for failing to introduce laws and highlighted the “practical challenges” that courts encounter while handling cryptocurrency-related fraud cases. It stressed that although banning digital currencies may not be ideal, the need for regulation is urgent.
For now, cryptocurrencies remain legal but unregulated in India. The government continues to tax gains from cryptocurrency trading, but there are no clear laws to protect investors or prosecute wrongdoers, leaving courts and victims to deal with a fast-evolving, largely unregulated space.
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