Before we get into explaining the process that needs to be followed to redress the grievance for someone who has been targeted in a digital asset fraud case, it is important to distinguish between situations where actual “fraud” has occurred from those where there is only a perception of fraud.
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It is not fraud that your crypto asset— which is highly volatile and subject to huge variations in value— ends up losing value in a very short duration, leading to wiping out even the initial investment you had made. That is just a characteristic feature of the asset. What is fraud is if you are promised huge increments in a short time, especially in the case of a new/untested crypto asset. It is also fraud when your digital wallet, which you thought was secure, is hacked and your crypto asset is looted.
Investing in a crypto asset is no different from making any other investment. If you are going to buy a property, you will ordinarily go through a trusted broker. For cryptocurrency as well, you should ideally engage with a reputed exchange. As with property, you need to carry out the necessary due diligence.
If you have been the target of an actual fraud, your remedies would lie in invoking a combination of provisions under the Indian Penal Code and the Information Technology Act, if criminal prosecution is to be pursued. If you seek to invoke civil remediation process, a remedy could be provided under the consumer protection law, though this proposition is untested so far.
The good news is that cyber law enforcement agencies are monitoring these transactions and keeping a close watch. The law, via regulations, has also imposed more stringent obligations upon platforms, especially in relation to grievance redressal. Further, the assistance for grievance redressal is now required to be communicated via the terms of use of the platform itself.
Users are advised to reach out to the grievance officer of the platforms, as the first point of contact, to voice their concerns, and complaints. Platforms must acknowledge such complaints within 24 hours and address the same within 15 days of its receipt.
As a claimant, or aggrieved party, one must get information / adopt the following process:
Information regarding registered office details of the service providers & platforms;
Seek redressal from the entities involved (banks, payment gateways, platforms) and receive all details they can gather about the “subject matter” transaction;
Reach out to file a complaint at the user’s local cyber cell police station, or that of the location from where such disruption has occurred. Fortunately, the cyber cells across major metropolitan areas have functional official websites, where a person can register their complaints directly. For instance, Delhi cyber cell office can be reached through their website – http://cybercelldelhi.in/Report.html.
Once a claimant has been able to file a complaint with the law enforcement agency, because of the swift nature of financial transactions on the internet, and as well as the involvement of banks and other RBI-regulated entities, there is a certain level of alacrity with which the agencies respond. The documents which are necessarily required to be filed will involve the following:
Written complaint explaining the complete incident;
Address of the cryptocurrency;
Amount of the cryptocurrency involved;
Address from and to whom purchase and sale of cryptocurrencies is made.
The above process is by no means exhaustive. Each cyber cell may have specific requirements, and may also seek further details around banking information, user credentials with the platform, and such other registration details. The process may vary between agencies, depending on the level of awareness. Experienced agencies have further commenced awareness drives, to educate end users, students, and professionals alike on the risks associated with virtual assets.
In the event that a particular cyber cell is not conversant with the norms, laws, or technology involved per se, or there is a reluctance to administer such and act on such complaint, the victims can then move the judicial magistrate for filing their complaint under Section 200 of the Criminal Procedure Code. This sets the criminal enforcement machinery into motion, which endeavours to achieve a satisfactory outcome for the aggrieved user.
Abhishek Malhotra is managing partner at TMT Law Practice.