The Supreme Court on Monday asked a crypto-currency scam accused to disclose the username and password of his bitcoin wallet to the Enforcement Directorate and cooperate with the investigation in the money laundering case against him.
A bench of Justices D Y Chandrachud and Surya Kant said that subject to Ajay Bhardwaj, accused of running ”multi-level marketing scheme” of bitcoin, making full disclosure his interim protection granted by the court will continue.
The apex court asked the ED to file an updated status report in the case.
The bench noted in its order, ”An application for cancellation of bail has been filed by the respondents. Additional Solicitor General Aishwarya Bhati appearing for ED has filed a status report. ED has submitted that the brother of the petitioner has died and petitioner (Bhardwaj) is in possession of the username and password of crypto wallets which must be disclosed to the investigating officer.”
It also noted the submission of senior advocate P C Sen, appearing for Bhardwaj, that all the records, e-mails and evidence is in custody of Pune Police and he has disclosed all the relevant details.
”The petitioner will file a reply on the application for cancellation of bail within two weeks. In the meantime, the petitioner shall cooperate fully with the investigation. Since senior counsel for petitioner states that disclosure has been of the username and password of the wallet, there would be no difficulty for the petitioner to make full disclosure conditional on which the ad interim protection to continue. ED shall file an updated status report,” the bench said.
At the outset, Sen said that his client has been asked to join the investigation and he has joined it as and where he was called and has been interrogated for 65 hours.
Bhati said that investment in bitcoin is not through normal banking channels and Bharwdwaj should be asked to disclose the username and password of the crypto-currency wallet he has.
She said that although the brother of Bhardwaj has died there are other members of the family who were involved in this case.
Bhati said that legality of crypto currency does not arise in this matter as it is all related to a Ponzi scheme, where people were duped.
”These are all writ petitions with different prayers including transfer of case to CBI and challenging the guidelines of 2016 but nothing has actually come out. It is a Ponzi scheme. All the writ petitions on the same cause and same FIR should be listed together.
Advocate Shoeb Alam, appearing for one of the investors Vipin Kohli, said that an application for cancellation of bail has been filed by him as Bhardwaj has not made full disclosure of facts to the court.
On February 25, the top court had asked the Centre to make its stand clear on whether crypto currency trade involving Bitcoin or any other such currencies is legal in India or not.
The top court was dealing with a case related to the quashing of multiple FIRs registered against Bhardwaj and others for allegedly duping investors across India by inducing them to trade in Bitcoin and assuring them high returns.
ED has submitted that they would file an affidavit on the legality of the crypto currency trade and added that the accused, who is seeking quashing of proceedings, has not been cooperating with the investigating agency after being granted bail by the court in 2019.
Bhati has said that 47 FIRs have been registered against the accused for duping people across the country and the issue involves a trade of 87,000 bitcoin worth Rs 20,000 crore.
The top court had directed Bhardwaj to appear before the investigating officer of ED within two days and thereafter cooperate with the investigation as and when called upon to do so.
The bench said the ad-interim order restraining the arrest of Bhardwaj shall continue till the next date of listing of the matter.
Alam had said that Bhardwaj has deliberately suppressed the fact that the chief metropolitan magistrate, Patiala House court, through a court notice had issued a proclamation requiring the appearance of the accused under Section 82 of Criminal Procedure Code.
The allegation against Bhardwaj is that he along with other co-accused, who are mostly his family members, had induced investors to invest in Bitcoin through a ”multi-level marketing scheme” on false promises of securing to the investors a 10 per cent assured monthly returns for 18 months that is total of 180 percent profit.
It was alleged that due to the dishonest inducement, the customers invested their bitcoins in the said business, but after making investment they did not get the assured returns.
The FIRs also said that to escape from inevitable punishment under the law, Bhardwaj and other co-accused persons collectively, in a dishonest manner and with the deliberate intention of destroying all the evidence shut down the fake 'gainbitcoin' website through which investors made the investment.
