Maharashtra Amends MPID Act To Allow Attachment Of Cryptocurrency In Fraud Cases
The Maharashtra legislature in Mumbai on Wednesday passed crucial amendments to the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999. The legislative change will allow authorities to attach virtual digital assets, such as cryptocurrencies and other blockchain-based digital instruments, in cases involving financial fraud.
The bill was officially introduced in the legislature by Devendra Fadnavis. It aims to significantly tighten the state's legal framework, ensuring the effective recovery of investor assets that have been lost to scams.
According to the state government, the amendments were necessitated by the growing use of cryptocurrencies, digital coins, and other blockchain-based assets in financial frauds. These assets have increasingly been utilized in unauthorized deposit schemes and various investor scams.
Previously, virtual digital assets were not covered under the existing definition of a "deposit" in the MPID Act. Because of this legal gap, the law was unable to effectively deal with frauds that specifically involved virtual digital assets, leaving authorities without the proper tools to recover these funds.
To resolve this issue, the newly passed amendment expands the definition of "deposit" within the Act. Under the revised law, "deposit" now includes any Virtual Digital Asset. The term will carry the exact same meaning as assigned to it under Section 2(111) of the Income-tax Act, 2025.
Beyond the inclusion of cryptocurrencies, the bill also addresses procedural delays in the legal system. It seeks to curb ongoing delays in MPID cases by capping the number of adjournments that can be granted before designated courts.
Additionally, the amendment introduces a strict financial requirement for appealing recovery orders. It is now mandatory for financial establishments to deposit 50 percent of their total liability before any of their appeals against recovery orders can be officially entertained.
This legislative update represents a major shift in how the state handles modern financial crimes and protects depositors from evolving digital threats.
