Gujarat HC Denies Bail in Cyber Fraud-Money Laundering Case

Gujarat HC Denies Bail in Cyber Fraud-Money Laundering Case

The Gujarat High Court has denied bail to an accused involved in a cyber fraud and money laundering racket that utilized mule accounts and converted illicit funds into USDT (Tether), a cryptocurrency. The Court held that the seriousness of the economic offence and its transnational footprint outweighs any mitigating factors.

The accused was charged under the Prevention of Money Laundering Act (PMLA) and relevant provisions of the Indian Penal Code (now BNS) for facilitating the laundering of proceeds through layered digital transactions. The prosecution argued that multiple bank accounts were used to layer funds before conversion into stablecoins, making recovery difficult.

The Court dismissed the plea noting that merely because the offence is triable by a Judicial Magistrate First Class (JMFC) does not diminish its gravity. It emphasized that financial crimes involving digital assets require stringent enforcement to deter future offences.

"The use of cryptocurrency to abscond with funds reflects sophistication and intent to evade law, necessitating custodial investigation,"

the bench observed. Practitioners should anticipate stricter bail standards in cyber-enabled financial crimes, especially where digital trails are fragile or cross-border.