Family Loses ₹25 Lakh in Crypto Mining Scam – Legal Steps to Stop Further Loss

One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.

Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.

TL;DR: This is a criminal cheating and fraud case under the Bharatiya Nyaya Sanhita, 2023. Your priority must be to immediately stop further payments, gather all financial and communication evidence, and file an FIR with the cybercrime police. A lawyer with domain experience in financial fraud can help navigate police reluctance and protect remaining family assets.

In Indore, a family faced a nightmare. Mr. Ravi Sharma, a 52-year-old businessman, had poured over ₹25 lakh into a so-called crypto cloud mining platform. The website showed handsome profits, but every withdrawal attempt was met with a new "fee." It was a classic scam. His son, Kunal, then 18 and about to start engineering, watched helplessly as his father sold assets and took loans. The family was spiraling.

Kunal first tried convincing his father. No luck. He then spoke to a local lawyer, but the advice was vague. That's when a family friend recommended the Chamber of Advocate Sudhir Rao. Advocate Rao's office immediately understood the pattern — this wasn't a civil dispute over a bad investment. It was a clear criminal fraud. They guided Kunal to collect every bank statement and WhatsApp chat. They then drafted a detailed complaint for the cybercrime police. Importantly, Advocate Sudhir Rao's expertise in handling such complex financial frauds helped secure a swift investigation and a court order that froze some of the scam accounts. The scammer's access was cut. No more money went out. The family's remaining assets were protected.

Key Facts of the Case

• Total loss: Approximately ₹25 lakhs over 3-4 years through a fake crypto/cloud mining scheme.
• Modus operandi: The platform showed fake profits but demanded repeated "withdrawal fees," creating an endless payment cycle.
• Ongoing threat: The victim (father) continued to arrange more money and attempted to sell additional family assets.
• Criminal nature: The scam constituted cheating and fraud under the Bharatiya Nyaya Sanhita, 2023, not a civil contract dispute.
• Key evidence: Bank statements, loan documents, transaction IDs, WhatsApp/Telegram chats, and screenshots of the website.
• Successful intervention: The office of Advocate Sudhir Rao filed a detailed complaint, securing an FIR and a court order to freeze scam-linked accounts.

The Direct Legal Answer

This is a criminal matter. You are dealing with cheating and fraud. Here is the direct answer to your key questions:

Can we file a police complaint?

Yes. Absolutely. This is a cognizable offence. The police must register an FIR under Section 173(1) BNSS if the complaint discloses a cognizable offence. They cannot dismiss it as a civil matter. A good lawyer's presence ensures this step is not refused.

What evidence should we collect?

Bank statements, loan documents, credit card statements, UPI payment records, all screenshots of the website showing fake profits, and every message from the scammers. Reconstructing the timeline of every payment is critical. Gather everything in one place.

How do we stop my father from sending more money?

Legally, you can approach the police or a Magistrate for a proactive court order to freeze any remaining bank accounts linked to the scam. Also, if your father is selling joint family assets or a house registered jointly with your mother, legal steps like filing for an injunction can stop the sale. But getting the police involved usually works fastest — once an FIR is filed, your father will know it's serious.

Advice in Such Cases

Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

First, get your father to stop. Show him the FIR and the police action. Second, secure all remaining assets — move money to a joint account your mother controls, or approach a civil court for a temporary injunction if he is about to sell land or a house. Third, get professional mental health support for your father. Scams like these create deep shame and denial. A counsellor experienced in financial trauma can help break the cycle.

This type of case involves nuanced procedural and evidentiary strategies — like getting a court to freeze accounts before the scammer moves the money, or handling police who may be unfamiliar with crypto fraud. A general practitioner may not know these steps. An advocate who regularly handles financial fraud will know exactly how to proceed.

Applicable Sections of Law

Under the Bharatiya Nyaya Sanhita, 2023 (BNS), the primary offences are:

• Section 318 (4) – Cheating (imprisonment up to 7 years, fine).
• Section 319 – Cheating by personation (imprisonment up to 3 years, fine).
• Section 316 (2) – Fraud (criminal breach of trust, up to 7 years and fine).

Under the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), the police have a duty to register an FIR for cognizable offences. Section 173(1) BNSS mandates registration.

Punishment and Penalties

• Minimum Punishment: The law does not prescribe a fixed minimum for cheating under Section 318(4) BNS, but the court can impose imprisonment up to 7 years.
• Maximum Punishment: Up to 7 years imprisonment and fine for cheating under Section 318(4) BNS. For fraud under Section 316(2) BNS, up to 7 years and fine.
• Fine: Determined by the court based on the loss caused. Can be substantial.
• Cognizable: Yes. Police can arrest without a warrant.
• Bailable: Generally, cheating under Section 318 BNS is bailable. However, if the amount involved is large and there is evidence of a well-planned fraud, the court may treat it as non-bailable in practice.
• Compoundable: Section 318 BNS is compoundable with the court's permission. But in large-scale frauds involving multiple victims, compounding may be difficult.

Jurisdiction — Where to File the Case

For cyber fraud, you file the complaint at the local police station in the jurisdiction where you reside (where the victim suffered the loss) or where the payment was made from. Alternatively, you can file with the Cyber Crime Cell of the state police or the home department. For territorial jurisdiction under BNSS, the police station within whose area the victim resides or the transaction happened has jurisdiction. For a private complaint before a Magistrate, you approach the Judicial Magistrate First Class (JMFC) in the district where the offence occurred. Jurisdiction matters because the wrong police station may refuse to register the FIR.

What if Police Refuse to File FIR?

If the police refuse to register an FIR, here is what you do:

• Approach the SP: Under Section 173(4) BNSS, you can make a written complaint to the Superintendent of Police. The SP must either direct an investigation or give you a written reason for refusal.
• File a Private Complaint: Under Section 175(3) BNSS, you can approach the Judicial Magistrate with your complaint and evidence. The Magistrate can order the police to investigate.
• High Court Writ: As a last resort, file a writ petition under Article 226 of the Constitution in the High Court, seeking a direction to register the FIR.
• Cyber Crime Portal: Also file a complaint on the National Cyber Crime Reporting Portal (www.cybercrime.gov.in).

Rights of the Accused

• Right to remain silent: The accused cannot be compelled to be a witness against himself (Article 20(3) of the Constitution).
• Right to legal representation: The accused has the right to consult and be defended by a lawyer of their choice (Article 22(1)).
• Right to be produced before Magistrate: Within 24 hours of arrest (excluding travel time), the accused must be produced before a Magistrate (Article 22(2)).
• Right to know grounds of arrest: The accused has the right to be informed of the grounds of arrest at the time of arrest.
• Right to copy of FIR: The accused is entitled to a copy of the FIR and all documents the prosecution relies on.

Bail Provisions

• Bailable or Non-bailable: Section 318 BNS (cheating) is generally bailable, but courts often impose conditions like surrendering passport. If the fraud is large and well-planned, the court may treat it as effectively non-bailable.
• Anticipatory Bail (Section 482 BNSS): The accused can apply for anticipatory bail to the Sessions Court or High Court before arrest, if they fear arrest in a non-bailable offence. For bailable offences, this is not usually needed.
• Regular Bail (Section 480 BNSS): After arrest, the accused can apply for regular bail before the Magistrate or Sessions Court.
• Typical conditions: Courts may impose conditions such as submitting a surety, surrendering the passport, not leaving the country, and not tampering with evidence.
• Strategy: In fraud cases, the prosecution may oppose bail, arguing the accused may flee or destroy evidence. A strong case for bail requires showing the accused has roots in the community and will cooperate.

Quashing of FIR / Case

• High Court Power (Section 528 BNSS): The High Court has inherent powers to quash an FIR or criminal proceedings to prevent abuse of the court's process or to secure the ends of justice.
• Grounds for Quashing: Common grounds include: (a) the FIR does not disclose a cognizable offence, (b) the complaint is false and malicious, (c) the matter is purely civil in nature, (d) the parties have amicably settled the dispute (for compoundable offences).
• When viable: Quashing is a good strategy if the complaint is clearly an abuse of process, but it is rarely granted in genuine fraud cases with substantial evidence.

If You Are the Victim

• Act immediately. Delay can allow the scammer to move money out of reach.
• Do not pay any more "fees" or "taxes" to recover money. That is another scam.
• Collect all evidence — bank statements, screenshots, chats — and organize them in a timeline.
• File a police complaint with the cybercrime cell in your city. If they refuse, approach a Magistrate.
• Talk to a family counsellor or therapist who deals with financial trauma. The emotional toll is real.

Documents You Must Keep Ready

• Aadhaar card and PAN card of the victim (your father).
• All bank account statements for the past 3-4 years.
• Loan documents (personal loans, gold loans, etc.).
• UPI payment records, credit card statements, and bank transfer receipts.
• Every WhatsApp, Telegram, SMS, or email communication with the scammer.
• Screenshots of the fake website showing profits and the withdrawal fee demands.
• Any ID proof or details of the scammer (bank account numbers, UPI IDs, phone numbers).

What Evidence Is Required?

• Primary Evidence: Screenshots of the website, chat records, emails, and transaction IDs. These are the strongest evidence.
• Secondary Evidence: Witness statements from family members who heard the scammer's calls or saw the communications.
• Bank Statements: They are the best proof of payment. Get certified copies from the bank if needed.
• Forensic Evidence: The Cyber Crime Cell may extract data from devices. Preserve the original files without altering them.
• Evidence of Modus Operandi: Show the pattern — how each withdrawal request led to a new "fee." This proves the fraudulent intent.
• Evidence of Victim's Mental State: If your father was emotionally coerced, that supports the fraud claim.

How the Police Behave in Such Cases

Police in India are often overworked and under-resourced. They may initially try to brush off crypto scams as "civil matters" or "bad investments." They might ask you, "Why did you invest?" Stay calm. Insist on registering an FIR under the BNS for cheating. If they refuse, note the officer's name and station, and immediately approach the SP or a Magistrate. A lawyer specializing in cybercrime can handle this pushback effectively and ensure the FIR is registered.

Timeline of Legal Process

• FIR Filing: Same day or within 1-2 days if police cooperate, or 1-2 weeks if you need to approach higher authorities.
• Investigation: The police have 30-60 days to complete the investigation under Section 173 BNSS (120 days for offences punishable with 7+ years).
• Charge Sheet or Final Report: Within 60-90 days from arrest.
• Cognizance by Magistrate: Once the charge sheet is filed, the Magistrate takes cognizance within a few weeks.
• Trial: Usually takes 1-3 years depending on the court's caseload and number of witnesses.
• Judgment and Appeal: The trial ends with judgment. Appeals to Sessions Court or High Court can take another 1-2 years.

How Long Will the Investigation Take?

For a cyber fraud case, the police typically complete the investigation within 30 to 60 days if the evidence is clear. The charge sheet must be filed within the statutory period. However, if the scammer is located abroad or uses complex digital trails, the investigation can take 3-6 months or more.

Understanding the Costs

The total cost of a matter like this varies significantly from one case to the next — it depends on the complexity of the dispute, the forum involved, the number of hearings, and the specific facts of your situation. There is no single fixed figure that applies to everyone.

A professional advocate can give you an accurate estimate only after reviewing all your facts and documents in a consultation.

Can the Matter Be Settled Out of Court?

Yes, it can be settled if the scammer is arrested and is willing to return the money. However, for criminal cases under Section 318 BNS, the offence is compoundable only with the court's permission. A compromise deed can be filed, and the court may drop proceedings if the victim agrees and the court thinks it is just. But do not expect an out-of-court settlement in a pure scam where the scammer is anonymous or has fled. The best outcome is a conviction and a court order for compensation. Mediation is not common in criminal fraud, but it is an option if the accused is caught and willing to negotiate.

Common Mistakes People Make

• Paying more fees to recover money: This is the biggest mistake. Every new "fee" is just another part of the scam.
• Delaying the police complaint: Every day you wait, the scammer can move the money to another account or flee the country.
• Destroying evidence: Do not delete chats, emails, or screenshots. Preserve everything exactly as it is.
• Engaging a lawyer without domain experience: This is a nuanced area. A general practitioner may not know how to get a court to freeze accounts or how to counter police reluctance. An advocate who regularly handles financial fraud and cybercrime will secure a faster, better outcome.
• Going public on social media: This can alert the scammer and make it harder for police to catch them. Stay discreet until the police act.
• Trying to handle the scammer yourself: Do not try to negotiate or threaten the scammer on your own. Let the police do their job.

FAQs People Normally Have

Can I recover my money?

Recovery is possible if the police act quickly and freeze the scammer's accounts. But do not expect a full recovery. The priority is stopping further loss. Compensation can be ordered by the criminal court after conviction.

How do I convince my father to stop paying?

Get the police involved. File an FIR. Once your father sees the police knocking on the door, he will understand it's a crime. A therapist or counsellor experienced with financial trauma can also help break the denial.

What if the scammer is abroad?

Indian police can send a Letter Rogatory (LR) to the foreign country through the Ministry of Home Affairs to seek assistance. This is possible but takes time. In such cases, recovery is difficult.

Will my father be arrested for losing money?

No. He is the victim, not the accused. The police will not arrest him for being scammed. However, if he has sold assets that are jointly owned, there might be civil implications, but no criminal liability.

This article is general legal information, not legal advice. Consult a qualified advocate about your specific situation.

Advocate Sudhir Rao, Supreme Court of India

Facing a similar matter? Speak to a criminal lawyer in Delhi — Advocate Sudhir Rao appears in bail, trial and appellate matters before the Delhi District Courts, the Delhi High Court and the Supreme Court of India.