Indian court denies bail in $240M crypto fraud case over societal impact

An Indian high court has denied bail to Abishek Sharma, one of the key accused in a $240 million cryptocurrency investment fraud case, citing the gravity of the offense and its broader societal impact [1]. The denial came after the court, led by Justice Sushil Kukreja, ruled that Sharma is prima facie involved in an extensive economic crime, and therefore not eligible for bail, despite his prolonged custody since October 2023 [2]. The court noted that while the Constitution of India guarantees the right to a speedy trial under Article 21, the nature of the case and the scale of the fraud suggest that the trial will not be concluded soon, thereby disqualifying the petitioner from bail [3].

The case, which began in 2018, came to light in September 2023 when an investor named Arun Singh Guleria filed a First Information Report (FIR) at the Palampur police station in Kangra district. Guleria alleged that a group of individuals, including Subhash Sharma—considered the main accused—along with Abishek Sharma and others, operated fraudulent platforms such as voscrow and Hypenext to lure victims with promises of high returns on digital asset investments [4]. The court emphasized that the accused exploited the innocence of victims by offering them inflated returns and manipulating cryptocurrency prices, effectively creating a Ponzi-like structure [5].

According to the Indian police, the fraudulent scheme affected approximately 80,000 investors, many of whom were local police personnel from the state of Himachal Pradesh [6]. The investigation revealed that the accused held investor meetings across multiple locations in the state, including Una, Kullu, and Mandi, furthering the illusion of legitimacy. To launder the stolen funds, the group reportedly created shell companies and used the proceeds to purchase luxury properties and high-end goods [7].

The court also highlighted that Abishek Sharma played a crucial role in maintaining the operations of the scheme, including organizing gatherings and managing interactions with investors. Despite the denial of bail, the court acknowledged that Sharma’s counsel had not presented new or substantial evidence to justify his release. The case remains ongoing with other accused individuals already in custody, while Subhash Sharma, the alleged mastermind, remains at large [8].

The denial of bail underscores the Indian judiciary’s approach to large-scale financial crimes, particularly in the digital asset space, where public trust is paramount. As the investigation continues, the case is expected to have significant implications for the regulation and oversight of cryptocurrency platforms in the country [9].

Source: [1][2][3][4][5][6][7][8][9]

[1] Indian court denies bail in $240M crypto fraud case, https://coinmarketcap.com/community/articles/689875cdd2aecc707a2ad7ce/