The Gujarat High Court has rejected bail for an accused involved in a cyber fraud scheme using mule accounts and cryptocurrency conversion, affirming that economic offences triable by Magistrates are still eligible for pre-trial detention.
No Bail Despite JMFC Jurisdiction in Economic Offence Case
The Gujarat High Court has refused to grant bail to an accused in a cyber fraud and money laundering case involving the use of mule bank accounts and conversion of illicit proceeds into USDT (Tether), a stablecoin. The Court held that the mere fact an offence is triable by a Judicial Magistrate First Class (JMFC) does not automatically entitle the accused to bail in serious economic offences.
Emphasizing the gravity and organised nature of the crime, the Court noted the involvement of cross-border digital currency transfers and layering techniques typical of sophisticated financial fraud. The prosecution alleged that the accused facilitated laundering through multiple layers of accounts, violating Sections 420, 468, and 471 of the IPC along with Section 3 of the Prevention of Money-Laundering Act, 2002.
This decision underscores the judiciary’s increasing scrutiny of bail in economic offences involving digital assets. Lawyers must assess jurisdictional nuances carefully—while trial may lie before a JMFC, preventive detention under Section 437 CrPC remains applicable when the offence affects the public economic order. The case may set a precedent for handling crypto-linked financial crimes.
Citations
- Indian Penal Code, 1860, Section 420
- Indian Penal Code, 1860, Section 468
- Indian Penal Code, 1860, Section 471
- Prevention of Money-Laundering Act, 2002, Section 3
- Code of Criminal Procedure, 1973, Section 437
