Landmark Judgments On Blockchain And Cryptocurrency Crimes
1. Internet and Mobile Association of India v. Reserve Bank of India (2020) 10 SCC 274
Court: Supreme Court of India
Bench: Justice Rohinton F. Nariman, Justice S. Ravindra Bhat, Justice V. Ramasubramanian
Facts:
In 2018, the Reserve Bank of India (RBI) issued a circular prohibiting banks and financial institutions from providing services to individuals or businesses dealing with cryptocurrencies. This indirectly made cryptocurrency trade impossible through official banking channels. The Internet and Mobile Association of India (IMAI) challenged this circular, arguing it violated their fundamental right to carry on trade and business under Article 19(1)(g) of the Indian Constitution.
Issue:
Whether RBI’s blanket prohibition on virtual currency transactions violated the constitutional rights of crypto exchanges and traders.
Judgment:
The Supreme Court struck down the RBI circular, holding it disproportionate and unconstitutional. The Court acknowledged that while RBI had authority to regulate financial institutions, it had not demonstrated any actual harm caused by cryptocurrency trading to the banking system.
Significance:
First major judgment recognizing cryptocurrency as a legitimate digital asset (though not legal tender).
The Court highlighted the need for balanced regulation rather than blanket bans.
It opened the door for blockchain-based businesses and exchanges to function legally in India.
2. United States v. Harmon (2021) – U.S. District Court for the District of Columbia
Court: U.S. District Court for the District of Columbia
Facts:
Larry Dean Harmon operated “Helix” and “Coin Ninja,” Bitcoin “mixing” services that helped users conceal the source and ownership of cryptocurrency by breaking transactions into small amounts and redistributing them. The U.S. Department of Justice charged Harmon with money laundering and operating an unlicensed money-transmitting business.
Issue:
Whether cryptocurrency “mixing” services constitute money laundering under U.S. law, given that Bitcoin is decentralized and pseudonymous.
Judgment:
The court ruled that Bitcoin qualifies as “money” under federal anti-money laundering (AML) statutes. It held that cryptocurrency mixers facilitate concealment of illicit proceeds, and thus the defendant’s actions fell squarely within the ambit of 18 U.S.C. §1956 (money laundering).
Significance:
Established a precedent recognizing Bitcoin as “money” for criminal law purposes.
Clarified that anonymity-enhancing blockchain services (like mixers) can be prosecuted for facilitating illegal activity.
Strengthened AML enforcement in the crypto ecosystem globally.
3. State of Maharashtra v. Ashu Jain (2021) – Special Cyber Court, Mumbai
Court: Special Cyber Court, Mumbai
Facts:
The accused, Ashu Jain, allegedly lured investors into a cryptocurrency investment scheme promising high returns through a blockchain mining business. After collecting large sums in Bitcoin and Ethereum, he absconded without delivering returns. Police traced digital wallets through blockchain analysis and filed charges under Sections 420 (Cheating) and 406 (Criminal Breach of Trust) of the IPC, along with Section 66D of the IT Act, 2000.
Issue:
Whether digital wallets and blockchain transaction trails can be treated as legally admissible evidence in criminal prosecution.
Judgment:
The court held that blockchain-based transaction records are admissible as electronic evidence under Section 65B of the Indian Evidence Act, provided proper certification is submitted. The accused was convicted based on wallet trails, exchange KYC records, and IP log analysis.
Significance:
First Indian case to legally recognize blockchain records as valid electronic evidence.
Strengthened law enforcement’s ability to trace and prosecute crypto scams.
Reinforced that blockchain does not provide absolute anonymity in crime.
4. SEC v. Ripple Labs, Inc. (2023) – United States District Court, Southern District of New York
Court: U.S. District Court, SDNY
Facts:
The U.S. Securities and Exchange Commission (SEC) filed a case against Ripple Labs, claiming that its sale of the cryptocurrency XRP constituted an unregistered securities offering under the Securities Act of 1933. Ripple argued XRP was a utility token used for cross-border payments, not a security.
Issue:
Whether the sale of XRP tokens amounted to the sale of “securities.”
Judgment:
The court gave a split ruling:
Institutional sales of XRP were deemed securities transactions, since they were investment contracts.
However, retail sales on crypto exchanges were not securities, as buyers had no expectation of profits based on Ripple’s actions.
Significance:
One of the most influential global crypto cases, clarifying how existing securities laws apply to blockchain tokens.
Provided a legal framework distinguishing between utility tokens and investment tokens.
Signaled to regulators worldwide that context matters in crypto enforcement.
5. Enforcement Directorate v. Amit Bhardwaj & Others (2020) – Delhi Special Court (PMLA)
Facts:
Amit Bhardwaj and his associates ran “GainBitcoin,” one of India’s largest crypto Ponzi schemes, promising 10% monthly returns through Bitcoin mining operations. Thousands of investors were defrauded. The Enforcement Directorate (ED) charged the accused under the Prevention of Money Laundering Act, 2002 (PMLA).
Judgment:
The court allowed attachment of digital wallets and exchange accounts, ruling that cryptocurrency holdings could be treated as “proceeds of crime” under PMLA. The accused were denied bail due to the large scale and digital complexity of the fraud.
Significance:
First Indian case where cryptocurrency was legally treated as a “money laundering instrument.”
Established that crypto-based Ponzi schemes fall within the PMLA’s purview.
Encouraged the ED and CBI to strengthen blockchain forensics in financial investigations.
Conclusion:
These landmark judgments collectively shape the global legal landscape of blockchain and cryptocurrency crimes. They demonstrate courts’ evolving approach — from regulatory skepticism to nuanced understanding of blockchain as both a technological innovation and a potential criminal tool.
Key Takeaways:
India emphasizes proportional regulation and evidence admissibility.
U.S. courts classify crypto assets within existing money and securities frameworks.
Blockchain evidence is now judicially recognized in cybercrime prosecutions.
Crypto frauds and laundering are being brought under traditional financial crime laws.
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