Raj Kundra Secures Bail in High-Profile Bitcoin Money Laundering Case
Mumbai witnessed a significant legal development as businessman Raj Kundra, the husband of Bollywood actor Shilpa Shetty, appeared before a special court handling money laundering cases. Following a summons, Kundra was granted bail in a 2018 crime concerning Bitcoins valued at over Rs 150 crore, marking a pivotal moment in this long-standing investigation.
Court Proceedings and Bail Grant
On January 5, special trial court judge R B Rote took cognisance of the Enforcement Directorate (ED) chargesheet in the case after hearing special public prosecutor Kavita Patil. The court summoned Kundra under the Prevention of Money Laundering Act (PMLA). Represented by his advocate Prashant Patil, Kundra sought bail under the provisions of the new criminal procedural law, the Bharatiya Nagarik Suraksha Sanhita (BNSS).
This provision allows an accused, who was not previously arrested in the case, to be released on a bail bond after the court summons them upon the filing of a chargesheet. Kundra's appearance and subsequent bail grant highlight the legal nuances in high-stakes financial crimes.
Details of the ED Case and Valuation Dispute
The ED's case alleges that Kundra received 285 Bitcoins in July 2017. According to prosecutor Kavita Patil, the agency valued these Bitcoins at $1 million, or approximately Rs 6.6 crore, at the time of the transaction. However, the ED adopted what Kundra's defense termed an "arbitrary" valuation method, using the price of Bitcoin as of April 16, 2024, which was around Rs 52 lakh per Bitcoin. This approach led to a total valuation of about Rs 150 crore.
The prosecution contends that a co-accused created an online platform and conspired with others to defraud numerous gullible investors by promising high returns in Bitcoin. Kundra's bail plea, however, denied any involvement in the alleged fraud and challenged the ED's valuation strategy.
Legal Arguments and Defense Strategy
Kundra's legal team argued that the ED's approach was "untenable and legally impermissible," describing it as a "pick-and-choose valuation without any statutory backing." They posed a critical question: if the value of Bitcoin dropped to Re 1 in 2024, would the ED attach only Rs 285? This rhetorical point underscored their claim that the valuation should be based on the date the alleged proceeds were generated—July 2017—not an arbitrary future date selected to benefit the prosecution.
Furthermore, Kundra questioned the attachment of properties worth Rs 150 crores, labeling it as "grossly disproportionate, ex facie arbitrary, and liable to be set aside." His defense emphasized that he has been regular in his appearances before the ED since 2018, demonstrating compliance with legal procedures.
Future Legal Moves and Implications
Kundra's lawyer indicated that they are contemplating approaching the Bombay High Court to seek the quashing of the summons issued in the ED matter. This potential move suggests that the legal battle may escalate, with broader implications for how financial crimes involving cryptocurrencies are prosecuted in India.
The case sheds light on the complexities of regulating digital assets like Bitcoin, especially in money laundering investigations. It also raises questions about valuation methodologies and the proportionality of asset attachments in such cases.
As the proceedings continue, this development serves as a reminder of the ongoing challenges in balancing enforcement actions with legal safeguards in India's evolving financial landscape.
