'Don't Play Games With Us' : Supreme Court Pulls Up GainBitcoin Scam Accused For Non-Compliance Of Direction To Share Passwords, Usernames

On March 28, 2022 the bench had asked Bhardwaj to make full disclosure to the Enforcement Directorate the usernames and password of the crypto currency wallet for getting interim protection. Subject to Bhardwaj making full disclosure of the username and passwords of the crypto currency wallets, the Top Court had directed for continuation of the interim protection which was granted to Bhardwaj.  

What Transpired In The Supreme Court Today?

At the outset, ASG Aishwarya Bhati appearing for ED submitted that Amit Bharadwaj was not cooperating with the authority by making full disclosure of the usernames and password of the crypto currency wallet.

Apprising the bench with regards to the submissions made by counsel for Bharadwaj on the last date of hearing that Pune Police had done full seizure of the crypto wallets and that all the material was lying with them, ASG said,

"We've communicated with the police too. Pune police has intimated that the petitioner never appeared before the police at any point of time and he never placed any record."

Urging the bench to dismiss Bhardwaj's writ in which he had sought for quashing of the case against him, ASG Bhati further contended that, "Bitcoin fraud is not through normal banking channels. The wallets are with the family members. Here proceedings are under PMLA, IPC. Bitcoins are taxable as an asset class. It's a ponzi scheme. Your lordships may dismiss the writ by way of interim orders which they got in 2019."

Strongly deprecating Bharadwaj's conduct, Justice Chandrachud observed :

"When we recorded your statement you have some responsibility. You will have to give the same and you can't play with the court. We had recorded in our last order. We will have to dismiss it for non compliance. Otherwise, you think that the Supreme Court is a district court where you can play all the games," remarked the judge.

On Senior Advocate Siddhartha Dave's submission that Bhardwaj was willing to give the passwords in presence of his lawyer, Justice Chandrachud said, "Mr Dave, your client knows everything otherwise the investigation cannot be completed. What is this that "I want the lawyer for giving the password?" First comply with the order. You don't need hardware and software for the password. Except the most relevant thing, you haven't submitted."

Senior Advocate Siddhartha Dave further submitted that Pune Police wanted information with regards to 3 wallets. He further contended that officers of the Pune Police had changed the password of 2 crypto wallets and had transferred 1200 bitcoins.

To further substantiate his contention, Dave said, "ED doesn't understand the transaction. Pune police understands. It's not Paytm, these are block chains. That is the surprising part- there are 3 wallets- 1 had submitted entire information. For 3 wallets they wanted information. For 2 they have changed the Passwords and they have transferred 1200 bitcoins and 1 PW's I have disclosed everything."

"Today, tomorrow, whichever day, I will disclose it and those 2 passwords are with Pune Police," Dave further submitted.

On ASG's contention that nothing has been given, Justice Chandrachud said, "Whatever is in your possession, you give them."

"It's not that they have disclosed everything. Cryptic keys are with the customers. You are compelling them to make a confession statement," remarked Justice Kant.

"You must give the passwords. The dignity of SC has to be maintained. We are not some Tis Hazari court. This is absolutely unheard of. You must comply with the statement. First let them tell us.. Sit with them tomorrow, tell them everything," Justice Chandrachud added.

While the bench asked Bhardwaj to disclose the information to the ED tomorrow, Justice Kant also suggested the authorities to prepare a questionnaire listing down the information which it wanted from Bhardwaj.

"You will have to jot down what information you want them to ask. Just prepare a questionnaire," remarked Justice Kant.

"Give us the questionnaire and show us too. We don't want the same course to be followed. I am telling you," added Justice Chandrachud.

Case Title: Ajay Bhardwaj v. Union of India and Ors| WP (Civil) 231/2019