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: If someone threatens you after a legitimate crypto exchange transaction, claiming you caused their gambling losses, that's criminal intimidation and extortion under the BNS. You don't owe them anything. Gather all communication records, file a police complaint, and consult an advocate. Counter-complaints for false accusations are also possible.
Key Facts of the Case
- A client in Pune operated a legitimate INR-to-crypto exchange service for a customer, Arjun Mehta.
- Arjun Mehta used the purchased crypto for online gambling and lost everything.
- Mehta's family demanded the money back, accusing the client of "brainwashing" their son.
- The family collected the client's personal details — college name, IMEI number — and threatened to ruin his reputation.
- Threats included: "Return the money or we will spoil your name in college and tell everyone."
- The client had no role in Mehta's gambling; it was a voluntary, arms-length crypto purchase.
- The office of Advocate Sudhir Rao handled the matter, securing a restraining order against the family for harassment.
The Direct Legal Answer
Here's the short answer: you are not liable for what someone does with crypto they bought from you — as long as the transaction itself was legal and voluntary. The threats you're facing amount to criminal intimidation and extortion under the BNS.
What proofs should we keep ready?
Bank transaction records showing the INR transfer. Screenshots of all chats, calls, or messages where the family threatened you. Any proof of the crypto delivery — wallet transaction IDs, exchange logs. Also keep evidence showing you had no involvement in the gambling.
What legal options are there?
File an FIR at your local police station under Section 318 BNS (criminal intimidation) and Section 308 BNS (extortion). If the police refuse, approach the Superintendent of Police under Section 173(4) BNSS, or file a private complaint before a Magistrate under Section 175(3) BNSS. A complaint can also be filed for defamation if they spread false stories.
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.
Don't engage directly with the threatening family. Document everything — don't delete a single message or call log. This type of case involves nuanced evidence of criminal intent and prior relationship, which a general practitioner might miss. An advocate who regularly handles extortion and cyber-crime matters will know what to preserve and how to counter false narratives.
If the family has police connections, you need someone who can handle that pressure at the station level. The right lawyer can ensure your FIR is registered and investigated fairly.
Applicable Sections of Law
Under the Bharatiya Nyaya Sanhita (BNS), 2023:
- Section 308 BNS — Extortion: Whoever intentionally puts any person in fear of any injury to that person or his reputation, and thereby induces the person to deliver any property or valuable security, commits extortion.
- Section 318 BNS — Criminal Intimidation: Threatening another with injury to his person, reputation, or property, with intent to cause alarm, or to cause that person to do any act he is not legally bound to do.
- Section 196 BNS — Defamation (if they spread false accusations publicly).
Under the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023:
- Section 173 BNSS — Procedure for registration of FIR and superintendence power of SP.
- Section 175(3) BNSS — Filing a private complaint before a Magistrate.
Punishment and Penalties
- Section 308 BNS (Extortion): Imprisonment up to 3 years, or fine, or both. Cognizable and non-bailable. Compoundable only if the victim agrees and the Magistrate permits.
- Section 318 BNS (Criminal Intimidation): Imprisonment up to 2 years, or fine, or both. Cognizable and bailable. Compoundable.
- Section 196 BNS (Defamation): Simple imprisonment up to 2 years, or fine, or both. Non-cognizable and bailable. Compoundable.
Jurisdiction — Where to File the Case
File the FIR at the police station in whose jurisdiction the threats were made or received — likely your location (e.g., Pune). For criminal intimidation and extortion, the Magistrate's court in that area has jurisdiction. If the family lives elsewhere, you can still file at your local station since the threat reached you there. Jurisdiction matters because the investigating officer must have territorial authority. A wrong station may refuse to register the FIR, wasting crucial time.
What if Police Refuse to File FIR?
Sometimes the police may hesitate, especially if the other party has local influence. Here's what you do:
- Approach the Superintendent of Police (SP) under Section 173(4) BNSS with a written complaint and request for direction to register FIR.
- File a private complaint before the Magistrate under Section 175(3) BNSS — the Magistrate can order the police to register and investigate.
- As a last resort, file a writ petition in the High Court under Article 226 for direction to register FIR.
- Keep copies of all complaints and proof of delivery — this shows you exhausted remedies.
Rights of the Accused
If the family files a counter-complaint against you (e.g., for "brainwashing" or illegal crypto dealing), you have these fundamental rights:
- Right to remain silent — you cannot be forced to make a statement that incriminates you (Article 20(3)).
- Right to legal representation — you have the right to consult and be defended by a lawyer (Article 22).
- Right to be produced before a Magistrate within 24 hours of arrest — without this, detention becomes illegal.
- Right to a copy of the FIR and to know the grounds of arrest — the police must give you these in writing.
- Right to apply for bail immediately — if the offence is bailable, it's a matter of right.
Bail Provisions
Criminal intimidation under Section 318 BNS is bailable — you can get bail from the police station itself. Extortion under Section 308 BNS is non-bailable, so bail must be sought from the Magistrate or Sessions Court. If you anticipate arrest, apply for anticipatory bail under Section 482 BNSS before the Sessions Court. The key is to show you are not a flight risk, have no criminal antecedents, and that the allegations are false. Your lawyer will file the bail application with a strong factual matrix.
Quashing of FIR / Case
If a false counter-FIR is filed against you, you can approach the High Court under Section 528 BNSS (inherent powers) for quashing. Grounds include: no prima facie offence made out, abuse of process of law, or that the dispute is purely civil. For example, if the family claims "brainwashing" but can't show any coercion or fraud, the FIR can be quashed. This is a powerful remedy — it can kill the false case early, saving years of litigation. Your advocate will argue that a voluntary crypto purchase cannot be criminal.
If You Are the Victim
You are the victim of extortion and criminal intimidation. Here's what to do:
- Don't pay a single rupee under threat — that can be used as evidence of your liability later.
- Document every threat — save screenshots, record calls (if legal), and note dates and times.
- Block the family on social media but keep all evidence intact.
- Inform your college or workplace proactively — tell them you are being harassed and have taken legal action.
- Don't confront the family alone — always have a lawyer or witness present for any meeting.
Documents You Must Keep Ready
- Identity proof: Aadhaar card, PAN card, passport-size photos.
- Bank statements showing the INR transfer from the buyer to you.
- Crypto wallet transaction IDs or exchange logs showing delivery of the crypto.
- All screenshots of WhatsApp, SMS, or social media messages containing threats.
- Call detail records (CDR) from your mobile operator showing call logs.
- Any emails or notices sent by the family or their lawyer.
- Your college ID or proof of enrollment (since they threatened to spoil your name there).
What Evidence Is Required?
- Documentary evidence: Bank transfers, crypto transaction records, chat logs — these prove the transaction was voluntary and arms-length.
- Circumstantial evidence: Show that you had no relationship with the buyer beyond the exchange — no friendship, no advice on gambling.
- Witness testimony: Anyone who saw the threats or knows your legitimate business operations.
- Forensic evidence: IMEI number, IP logs, and device data may be needed if the police investigate digital threats.
- Primary vs secondary: Original screenshots and bank statements are primary evidence. If you lose them, secondary evidence like printed copies with affidavit may be allowed but weaker.
How the Police Behave in Such Cases
Police typically see extortion and intimidation cases seriously when there's clear evidence of threats. However, they may initially try to mediate or dismiss it as a "civil dispute" over money. If the family has relatives in the force, the local station may be biased. That's why you need your advocate present during complaint filing. The police will note your statement, collect evidence, and if a cognizable offence is made out, they must register an FIR. If they resist, the SP or Magistrate route works.
Timeline of Legal Process
- Day 0 – FIR registration: If police cooperate, FIR registered within 24-48 hours. If resisted, can take 1-2 weeks through SP or Magistrate.
- Investigation (1-3 months): Police collect evidence, record statements, and may arrest if non-bailable offence is made out.
- Chargesheet (within 90 days for non-bailable, 60 days for bailable): Police file final report in court.
- Cognizance (1-2 months): Magistrate takes cognizance and issues summons to the accused.
- Framing of charges (1-3 months): Court frames charges based on evidence.
- Trial (6 months – 1 year): Evidence and arguments before Magistrate or Sessions Court.
- Judgment (1-2 months after trial): Court delivers verdict.
- Appeal (if any, 6 months – 1 year): Goes to Sessions Court or High Court.
How Long Will the Investigation Take?
For extortion and intimidation cases, investigation typically takes 2-3 months. The police must file a chargesheet within 60 days for bailable offences (Section 318 BNS) and 90 days for non-bailable (Section 308 BNS). If they can't, you can apply for default bail. Realistically, if the evidence is clear and the other party is cooperative, investigation may wrap up in 4-6 weeks.
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, but only if both sides agree. Criminal intimidation and extortion are compoundable offences — meaning you and the accused can settle with the court's permission. A mediation session at a Lok Adalat or through a neutral third party can help. If the family realises they have no case, they may agree to a written apology and withdrawal of all threats. In return, you can agree not to pursue the case. But never accept a settlement that makes you pay money for a transaction you executed lawfully — that sets a dangerous precedent.
Common Mistakes People Make
- Engaging a lawyer without domain experience: This is a specialised area involving crypto transactions, digital evidence, and extortion. A general practitioner may not know how to preserve crypto transaction logs or counter false "brainwashing" claims. Domain-specific advocates handle evidence better and get faster outcomes.
- Deleting communication records: People often delete threatening messages out of fear or anger. That destroys key evidence. Preserve everything — screenshots, call recordings, even if abusive.
- Paying under pressure: Returning the money "to avoid trouble" can be seen as admission of liability. It also encourages further extortion.
- Posting about the case on social media: Anything you say publicly can be used against you in court. Keep details confidential and only share with your lawyer.
- Confronting the family directly: Verbal arguments escalate the situation and may lead to counter-allegations. Let the law handle it.
- Failing to file FIR quickly: Delay can weaken your case — police may think you're not serious. File immediately after consulting your advocate.
FAQs People Normally Have
Can I be held liable for what someone does with crypto they bought from me?
No — not unless you induced them to gamble or misled them about the use of the crypto. A simple exchange for value is a valid contract. The buyer bears full responsibility for how they use the asset.
What if the family files a false case against me for "cheating"?
You can file a counter-complaint for criminal intimidation and also seek quashing of the false FIR under Section 528 BNSS. Your advocate will show the transaction was legitimate and the allegations are baseless.
Is crypto trading illegal in India?
No. Crypto trading is not illegal in India. However, it's unregulated — no specific law bans it, but the government has imposed a 30% tax on gains. As long as you are not operating a scam or unregistered exchange, it's lawful.
How do I prove I didn't "brainwash" the buyer?
Show records of the transaction — it was a simple purchase with no additional advice or relationship. If you have no chat history discussing gambling or betting, that itself disproves the allegation. Witnesses can also confirm your business is legitimate.
Can I get damages for defamation if they spread false stories?
Yes — you can file a civil defamation suit for damages, or a criminal complaint under Section 196 BNS. The key is to prove the statements were false and harmed your reputation. Document any instance where false stories were published or spoken about you.
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.