Custodial interrogation is essential in cryptocurrency fraud cases to recover digital trail and unearth larger conspiracies.

The applicant sought anticipatory bail regarding FIR No. 153/2025, registered by the Crime Branch, Delhi, involving a cyber fraud amounting to approximately ₹1 crore

The prosecution alleged that the applicant induced the complainant to transfer USDT 111,247 (digital currency) to a wallet controlled by the applicant under the false pretext of lucrative investments in Dubai real estate

Investigation revealed the applicant retained a portion of the funds before layering the remainder to associates, including co-accused Bharat

The applicant contended he was merely a facilitator/intermediary, had joined the investigation twice, and had already surrendered his mobile phone

1. Whether the applicant is entitled to the grant of anticipatory bail despite allegations of an organized cyber fraud and a clear digital money trail

2. Whether the applicant’s cooperation in the investigation, by mere physical appearance and surrender of a device, is sufficient to bypass the need for custodial interrogation in complex cryptocurrency offences

The court applied the provisions of the Bharatiya Nyaya Sanhita, 2023 (BNS), specifically Sections 318(4) (Cheating), 316(2) (Criminal Breach of Trust), and 61(2) (Criminal Conspiracy)

the principle that the grant of anticipatory bail is not a matter of right, especially in cases of organized cybercrime involving digital assets where custodial interrogation is vital for unearthing a larger conspiracy, tracing the money trail, and recovering credentials like seed phrases or private keys which are within the exclusive knowledge of the accused

The Court reasoned that mere participation in the investigation does not automatically qualify an applicant for anticipatory bail

The analysis focused on the applicant's conduct during questioning, noting significant inconsistencies: he claimed to have no source of income, no permanent address, and no mobile phone, yet he operated a non-KYC "Trust Wallet" involved in high-value cryptocurrency transactions

The court observed that the "money trail" prima facie established the applicant’s role in layering cheated funds

the court held that because the applicant allegedly concealed recovery credentials (seed phrases) for the digital wallets, the Investigating Officer (I.O.) requires custodial interrogation to access the proceeds of crime and identify associates using encrypted communication like VPNs and WhatsApp

It held that the severity of the organized cyber fraud, the necessity to recover the cheated amount of ₹1 crore, and the high risk of the applicant absconding—given his lack of verifiable local ties or assets—outweighed the plea for liberty

The Court directed that the custodial interrogation was necessary for a technical and effective investigation into the cryptocurrency racket