Gujarat HC Denies Bail in USDT Money-Laundering Case

The Gujarat High Court has refused bail to an accused involved in a sophisticated cyber fraud and money laundering operation that utilized mule accounts and converted illicit proceeds into cryptocurrency, specifically USDT. The court underscored that the mere classification of an offence as triable by a Judicial Magistrate First Class (JMFC) does not automatically entitle the accused to bail in cases involving economic offences.

The court noted that the investigation revealed the accused’s role in orchestrating multiple bank accounts to layer and integrate proceeds of cyber fraud. The laundering mechanism included rapid conversion into stablecoins, which the Enforcement Directorate argued complicated traceability. Citing the seriousness and transnational nature of the financial crime, the court held that

"economic offences involving digital assets require stricter scrutiny at the bail stage to prevent tampering and ensure effective prosecution."

This ruling signals a growing judicial reluctance to grant bail in financial cybercrime cases, especially where cryptocurrency is involved. Practitioners should expect heightened scrutiny of bail applications in such matters, with courts emphasizing the need to preserve the integrity of ongoing investigations under the PMLA and the Information Technology Act.