Virtual Digital Assets Grievance Procedure

Before explaining the process to be followed to remedy the grievance of a targeted person in a digital asset fraud case, it is important to distinguish between situations where true “fraud” has occurred and those where it there is only a perception of fraud.

It is not a fraud that your crypto asset – which is very volatile and subject to huge variations in value – ends up losing value in a very short time, which even leads to the elimination of the initial investment that you had done. It’s just a feature of the asset. What a fraud is if you are promised huge increases in a short period of time, especially in the case of a new/untested crypto asset. It is also a 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 than making any other investment. If you are considering buying a property, you will usually go through a trusted broker. For cryptocurrency as well, you should ideally engage with a reputable exchange. As with property, you must perform due diligence.

If you have been the target of actual fraud, your remedies would be to invoke a combination of provisions of the Indian Penal Code and the Information Technology Act, should criminal charges be brought. If you seek to invoke a civil redress procedure, recourse may be available under consumer protection law, although this proposition has not yet been tested.

The good news is that cyber law enforcement agencies monitor these transactions and monitor them closely. The law, through regulations, has also imposed stricter obligations on platforms, particularly in terms of redressing grievances. Additionally, grievance assistance must now be communicated through the terms of use of the platform itself.

Users are advised to contact the Platforms Complaints Officer, as the first point of contact, to express their concerns and complaints. Platforms must acknowledge receipt of such complaints within 24 hours and process them within 15 days of receipt.

As a plaintiff, or injured party, you must inform yourself / adopt the following approach:

Information regarding the contact details of the registered office of service providers and platforms;

Seek redress from relevant entities (banks, payment gateways, platforms) and receive any details they may gather about the “subject” transaction;

Contact the user’s local cyber cell police station or the one where the disruption occurred from to file a complaint. Fortunately, cyber cells in major metropolitan areas have functional official websites, where a person can register complaints directly. For example, the Delhi cybercell office can be accessed through its website –

Once a requester was able to file a complaint with the law enforcement agency, due to the fast-paced nature of internet financial transactions, as well as the involvement of banks and other entities regulated by the RBI, there is a certain level of readiness with which agencies respond. The documents that must be filed will relate to the following elements:

Written complaint explaining the complete incident;

Cryptocurrency address;

Amount of cryptocurrency involved;

Address from and to whom the 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 additional details of banking information, user credentials with the platform, and other registration details. The process may vary from agency to agency, depending on the level of awareness. Experienced agencies have additionally launched awareness campaigns to educate end users, students, and professionals about the risks associated with virtual assets.

In the event that a particular cyber cell is unaware of the standards, laws or technology at issue per se, or if there is an unwillingness to administer such and act on such a complaint, victims may then apply to the Magistrate court to lodge their complaint under Article 200 of the Code of Criminal Procedure. This sets in motion the penal enforcement mechanism, which strives to achieve a satisfactory outcome for the aggrieved user.

Abhishek Malhotra is Managing Partner at TMT Law Practice.

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