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by sayum
03 April 2026 7:01 AM
“Digital Shadows of a Fraud Empire” — In a detailed and scathing judgment Delhi High Court dismissed the anticipatory bail applications of two alleged key operatives of a cyber-financial syndicate, Bhaskar Yadav and Ashok Kumar Sharma, accused of laundering over ₹65 crore through layered mule accounts and crypto transactions routed via the UAE-based platform, PYYPL.
Justice Girish Kathpalia, while rejecting their pleas under Section 438 CrPC, held that both applicants failed to meet the mandatory twin conditions under Section 45 of the Prevention of Money Laundering Act (PMLA) and that their custodial interrogation was essential for unearthing deeper layers of a transnational cyber-laundering operation.
“It is not a case of mere dealing in cryptocurrency, which per se is not a crime in this country,” the Court observed. “The present cases exhibit a vast intricate mesh of movement of money, fraudulently extracted from gullible investors… This is not a simple matter of tax liability on crypto transactions.”
“Layers Within Layers”—Digital Shells, Fake Firms, and WhatsApp Bribes
The Court noted that over 30 fictitious entities were allegedly created and controlled by the petitioners to channel fraudulent funds into the PYYPL platform, where the money was either withdrawn abroad (mainly in Dubai) or converted into virtual assets like cryptocurrency.
“68 bank accounts linked to 30 mobile numbers were found transacting over ₹100 crores… 7 of those numbers belonged to the applicants,” the judgment revealed.
The petitioners, both chartered accountants, allegedly designed complex digital networks, sourcing bank accounts with fake KYCs, and shared OTP access via Zoho-linked SMS forwarder apps. These accounts were then handed over to foreign handlers via Telegram groups, operated by aliases like “Jeniffer,” “Tom Support,” and “Alen.”
The Court was also presented with evidence of bribes paid to local police, as well as assault on Enforcement Directorate officers, alongside allegations of wiping digital evidence—all aggravating factors in denying pre-arrest protection.
“PMLA's Twin Test Applies with Full Force to Anticipatory Bail”
Rejecting the defence argument that anticipatory bail should be granted on the grounds of parity with co-accused and the non-arrest of Rohit Agarwal, Justice Kathpalia emphasized that Section 45 PMLA’s twin conditions apply equally to anticipatory bail.
“Article 21 cannot be read to block custodial interrogation,” he held. “The right to liberty must be weighed against the collective public interest in effective investigation… In cases like these, the liberty of the accused must yield to the need for discovery of transnational financial crime.”
On the co-accused, the Court clarified:
“The parity argument fails—Ajay and Vipin were granted regular bail, not anticipatory bail. And Rohit Agarwal, despite similar culpability, aided the probe and remains unarrested based on specific prosecutorial discretion, not innocence.”
“Crypto Not the Crime, But the Cover”—Court Unmoved by Simplistic Defence
Calling the applicants’ defence a “simplistic” whitewash of deeper involvement, the Court sharply criticized the narrative that they were merely crypto traders facing overregulation.
“This is not about taxation of crypto gains,” Justice Kathpalia said. “This is about a coordinated digital heist dressed as a legitimate enterprise… backed by data, bank trails, and extensive forensic mapping.”
The Court referred to detailed forensic reports revealing massive linkage between common mobile numbers and email IDs across hundreds of mule accounts, and noted that ₹65 crores were routed by these two individuals alone to PYYPL.
“No Evidence You’re Not Guilty—And No Assurance You Won’t Reoffend”
In stark terms, the Court concluded that the applicants had failed both prongs of Section 45's mandatory test:
“There is no material to satisfy this court that there are reasonable grounds for believing that the accused are not guilty. On the contrary, fresh complaints continue to emerge. There is also a clear risk of tampering with evidence.”
The Court emphasized that economic offences must be viewed with a stricter lens, referencing Y.S. Jagan Mohan Reddy v. CBI, Rohit Tandon v. ED, and Vijay Madanlal Chaudhary v. Union of India to affirm the distinct legal treatment of financial crimes with transnational implications.
“Both these anticipatory bail applications are dismissed,” Justice Kathpalia ruled, declining any protection from arrest and underscoring the importance of custodial interrogation in a still-unfolding, highly technical financial conspiracy.
This case is being closely watched by legal and financial observers as it redefines the contours of cybercrime, cryptocurrency abuse, and the reach of anti-money laundering enforcement in India’s digital age.
