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The court observed, “There is no explanation as to why those five persons (who were named in the FIR) were never arrested and accused/applicant was arrested whose name was not even in FIR”.
The Rouse Avenue Court, recently, granted bail to Lakshay Vij in a cryptocurrency cheating case, noting that “Allegations by itself cannot be taken to be gospel truth when the same is not supported by any material”.
The court opined that even if the allegations by CBI are assumed to be true, the agency failed to provide any evidence to support these allegations. “As such allegations are only that accused was member of some WhatsApp group. There is nothing showing that it is accused/applicant who either received or transferred crypto currency into any bank account”, Special Judge Shailender Malik emphasized.
Lakshay Vij, represented by Senior Advocate Suryakant Singla, contended that there was no evidence linking him to the alleged defrauding of foreign nationals. It was stated that Vij was not the beneficiary of the alleged proceeds of the crime. It was also claimed that no monetary chain connecting the victim's account, via cryptocurrency wallets, to Vij was established.
Senior Advocate Singla asserted that Vij has been in judicial custody since October 24, 2024, following a five-day police remand, during which nothing incriminating was recovered. It was also alleged that the CBI selectively arrested Vij while failing to apprehend five other individuals named in the FIR, who were reportedly beneficiaries of the crime.
Per the facts, on May 21, 2022, a U.S. citizen, Lisa Roth, was working on her laptop when her system was hacked. She was contacted by an individual posing as a Microsoft employee, who allegedly misled her into transferring USD 400,000 from her Fidelity account to her First State Bank account. The caller reportedly took unauthorized remote control of her system using her mobile phone and email ID and subsequently transferred the amount to an Okay Coin account.
The money was later converted into cryptocurrency and transferred to the crypto wallets of individuals named in the FIR: Praful Gupta, Rishabh Dixit, Sarita Gupta, Kunal Almadi, and Gaurav Pahwa. The complaint was based on source information and inputs from the USA.
According to the CBI, Lakshay Vij was a member of the WhatsApp group where details of crypto wallets and bank accounts were shared, facilitating the transfer of crime proceeds to various accounts. Following the RC registration, the Enforcement Directorate (ED) registered an ECIR and arrested Vij on July 22, 2024.
Public Prosecutor Amjad Ali, for CBI, contended that the allegations against Vij involved the conversion of proceeds of crime into cryptocurrency, with the investigation still ongoing. It was argued that Vij failed to cooperate with the investigation and did not comply with the High Court's directions to provide the mobile device.
The court, after considering submissions and reviewing the records, observed several discrepancies in the investigation. The FIR named five individuals as accused, alleging their involvement in inducing the victim to part with USD 400,000, converting it into cryptocurrency, and transferring it to crypto-wallets.
However, the court noted the absence of any explanation as to why those five accused persons were not arrested, while Vij, whose name was not mentioned in the FIR, was apprehended. It was an admitted fact that Vij had cooperated with the investigation on multiple occasions in May and June 2024 but was arrested on October 24, 2024.
The court further opined that the allegations against Vij primarily stated that they were a member of a WhatsApp group with other accused individuals and provided instructions for transferring cryptocurrency. The court noted that CBI failed to produce evidence, apart from the claim that Vij was part of the WhatsApp group.
Additionally, the court noted that CBI failed to provide further evidence connecting Vij to the alleged transactions. Therefore, the court held that bail could not be denied solely based on unsubstantiated allegations.
Previously, the court had remanded Vij to 14 days of judicial custody. Additional Chief Judicial Magistrate (ACJM) Nishant Garg had observed that "Since the investigation is at its initial stages, for the purpose of a fair and expeditious investigation and to prevent the accused from tampering with the evidence and influencing the witnesses, accused Lakshay Vij is remanded to judicial custody till 11.11.2024."
For Applicant: Senior Advocate Suryakant Singla With Advocates Prabhav Ralli, Dev Vrat Arya, Vanya Gupta and Mayanka DhawanFor CBI: Public Prosecutor Amjad AliCase Title: Lakshay Vij vs. CBI
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