Justice Sasikanta Mishra made it clear that cryptocurrencies are not considered money under the Commercial Bills and Currency Circulation Schemes (Prohibition) Act nor are they a deposit under the Odisha Investor Interest Protection Act. It therefore ruled that mere cryptocurrency transactions do not constitute a crime under these laws.

The Orissa High Court in India has delivered an important judgment clarifying the legal status of cryptocurrency transactions. This landmark decision emerged from a case involving two men accused of defrauding people through a Ponzi, or multi-level marketing (MLM) scheme.

The real legal question was whether these activities constituted an offense under the Commercial Bills and Money Circulation Schemes (Prohibition) Act and the Odisha Investor Interest Protection Act (OPID). Justice Sasikanta Mishra, presiding over the single-judge bench, ruled:

“Cryptocurrency is not money within the meaning of the Trade Bills and Money Circulation Schemes (Prohibition) Act and public investment in cryptocurrency does not constitute a deposit within the meaning of the OPID Act.” The judge also added:

“Merely transacting with cryptocurrency cannot be considered illegal in any way. Therefore, it cannot be considered an offense under the OPID Act.”

The defendants in this case allegedly operated under the name of a fictional cryptocurrency company that encouraged people to invest in a digital currency called Yes World Token. The defendants encouraged private investors to invest by creating trust wallets and promising high returns. This investment approach required participants to recruit more new members. As the number of these new members increased, the bonuses or interest payments would also increase. This scheme appeared to follow the principles of multi-level marketing and raised concerns about its legality and investor protection.

Justice Mishra stated that there was no evidence that the accused dishonestly induced any person to deliver goods. He emphasized that the investment method does not support allegations of fraud as the deposited amounts remain safe in investors’ trust wallets. The judge concluded:

“Therefore, prima facie, the offense under Article 420 of the Criminal Code does not appear to have occurred.” Elaborating further, the judge continued:

“There is no evidence of forgery, manipulation, production, etc. of any document, record, etc. that would constitute a crime within the scope of Articles 467/468/471 of the Criminal Code.”