Landmark Judgments On Ico And Nft Scams
⚖️ 1. ICO Fraud in Kerala (2022) – ₹1,200 Crore Scam
Court: Kerala High Court
Background: A Kerala-based individual launched an ICO for a non-existent cryptocurrency, attracting over 900 investors who collectively lost more than ₹1,200 crore.
Judicial Issue: Whether the accused's actions constituted a fraudulent scheme under Indian law.
Judgment: The court upheld the charges, emphasizing that the accused had misrepresented the existence and value of the cryptocurrency, leading to significant financial losses for investors.
Significance: This case marked one of India's largest crypto-related frauds, highlighting the need for stringent regulatory oversight in digital financial offerings.
⚖️ 2. Treasure NFT Crypto Scam (2025) – Nationwide Fraud
Court: Central Bureau of Investigation (CBI) Investigation
Background: The 'Treasure NFT Crypto Scam' was a meticulously orchestrated fraud that resulted in significant financial losses for thousands of investors across India.
Judicial Issue: Whether the promoters of the NFT project had violated financial regulations and defrauded investors.
Judgment: The CBI conducted extensive investigations, uncovering fraudulent activities and initiating legal proceedings against the perpetrators.
Significance: This case underscored the vulnerabilities in the NFT market and the necessity for regulatory frameworks to protect investors.
⚖️ 3. Delhi High Court Denies Bail in Crypto Ponzi Case (2025)
Court: Delhi High Court
Background: Umesh Verma was accused of defrauding 61 investors through a Dubai-based cryptocurrency platform, Pluto Exchange, promising high returns despite the government's de-recognition of cryptocurrencies.
Judicial Issue: Whether the accused should be granted bail considering the severity of the economic implications.
Judgment: The court denied bail, citing the detrimental economic impact of cryptocurrency-related fraud and the accused's history of fraudulent behavior.
Significance: This decision highlighted the judiciary's stance on the seriousness of digital financial crimes and the need for stringent legal actions.
⚖️ 4. Bengaluru Digital Artist Duped in NFT Scam (2024)
Court: Bengaluru Cyber Crime Cell
Background: A 71-year-old digital artist was lured into a scam involving fake NFT sales, resulting in a financial loss of approximately ₹1.58 lakh.
Judicial Issue: Whether the accused had engaged in fraudulent activities under the Information Technology Act.
Judgment: The cyber crime cell initiated an investigation, leading to the identification and arrest of the perpetrators.
Significance: This case emphasized the susceptibility of digital artists to NFT-related scams and the importance of cybersecurity awareness.
⚖️ 5. CBI Uncovers ₹350 Crore Crypto Ponzi Scheme (2025)
Court: Central Bureau of Investigation (CBI) Investigation
Background: The CBI uncovered a large-scale crypto Ponzi scheme involving multiple modules across various cities, defrauding investors of over ₹350 crore.
Judicial Issue: Whether the accused had violated financial regulations and engaged in money laundering activities.
Judgment: The CBI conducted search operations and arrested several individuals involved in the scam, initiating legal proceedings.
Significance: This case highlighted the complexities of digital financial frauds and the necessity for coordinated efforts in investigation and prosecution.
🧠 Key Legal Insights
Regulatory Gaps: The absence of specific regulations for ICOs and NFTs in India has led to challenges in prosecuting such scams.
Admissibility of Digital Evidence: Courts have increasingly recognized the importance of digital evidence, such as blockchain records and transaction logs, in establishing the occurrence of fraud.
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