New Delhi, Jul 30 A Delhi court has rejected a CBI plea seeking cancellation of bail granted to an accused in the GainBitcoin cryptocurrency fraud case, saying that liberty of an individual is a precious right under the Constitution.
The case pertains to the 'GainBitcoin Ponzi Scheme' floated by one Variabletech Pvt Ltd.
The firm allegedly induced the public to invest in the scheme promising high returns. The company has been accused of misappropriating the funds thus collected.
According to the CBI, the Ponzi Scheme was launched in 2015 by Amit Bhardwaj (now deceased), along with Ajay Bhardwaj and their network of agents. The scheme operated through multiple websites under the facade of Variabletech.
Special Judge M P Singh was hearing a CBI plea seeking cancellation of bail granted to the accused Ayush Varshney on April 7 by a magistrate.
Varshney had been intercepted by immigration authorities at Mumbai airport on March 9 while he was trying to flee India and handed over to the CBI, which arrested him the next day.
The agency earlier registered a case under IPC sections 406 (criminal breach of trust), 420 (cheating) and 120 B (criminal conspiracy), besides Section 66 (computer-related offences) of the Information Technology Act.
In an order dated July 29, made available on Thursday, Judge Singh said, "Liberty of an individual being a precious right under the Constitution, this court would be slow to interfere with the liberty already granted to him."
The judge noted the accused's counsel, Dhruv Gupta, had vehemently opposed the agency's application, saying it failed to show even a solitary finding of the magisterial court granting bail as factually or legally incorrect.
The court said that Varshney has been accused of being the beneficiary of receiving several bitcoins belonging to the victims, but the fact alone cannot be determinative.
"It is to be noted that in this case, the total volume of gainbitcoins proceeds exceeds 2 lakh bitcoins; and out of which Ayush Varshney had allegedly received 70 bitcoins that are stated to be traceable to the victims.
"Further, even assuming, for the sake of argument, that he had indeed received the said 70 bitcoins, such a circumstance cannot, by itself, be regarded as determinative of the issue (regarding bail)," the court said.
It said that no direct victim complaints of fraud or cheating were presented against the accused, and he was implicated solely through alleged criminal conspiracy.
The CBI has alleged that Varshney was a co-founder of Darwin Labs Private Limited and the entity was instrumental in developing the entire technological infrastructure of the fraudulent scheme, including Bitcoin mining pool platform GBMiners.com, BitCoin Payment Gateway, Coin Bank BitCoin wallet, and the Gain BitCoin investor-facing website.
It claimed that Darwin Labs and its co-founders played a key role in the design, development and deployment of the crypto token MCAP and the corresponding ERC-20 smart contract.
The court, however, said, "It appears to be not in dispute that Amit Bhardwaj was into crypto trading and had been collecting investments from the public at large even before 2016, i.e. even before Darwin Labs Pvt. Limited had developed the mining pool software."
It added, "Therefore, the process of alluring/enticing the gullible victim had apparently been afoot even before Ayush Varshney's company came into the picture in the year 2016."
It said that two courts had previously granted him anticipatory bail against the same set of allegations in the present FIR.
"Thus, the record apparently shows that Ayush Varshney was not 'absconding' in this matter. Most likely, he had no knowledge of the proceedings in this case," the court said.
It said that the agency failed to show any evidence of post-bail misconduct or tampering with evidence by the accused, and this was a "crucial factor" regarding Varshney's conduct.
"The gravity of the offence cannot be the sole determining criterion in adjudication of bail. Trial (magisterial) court has rightly observed that the object of bail is to secure the presence of the accused at the time of trial, and that bail is not punitive," the court said.
It said an accused cannot be kept behind bars in perpetuity just because other accused are absconding.
"It is uncertain as to when, and if at all, the other accused persons would be apprehended in this matter. Continued incarceration of Ayush Varshney in judicial custody will neither aid the investigation nor expedite the trial proceedings," the judge said.
"I do not think that Ayush Varshney is a flight risk. That apart, it does not appear that he would tamper with the evidence or influence any witness," he added, dismissing the CBI's application.
