Mumbai: To tighten the legal framework for recovery of investor assets, virtual digital assets (VDAs) like cryptocurrencies and other blockchain-based digital instruments can be now attached in cases involving financial fraud. Maharashtra legislature on Wednesday passed amendments to the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 (MPID Act). The Bill, introduced by chief minister Devendra Fadnavis, seeks to curb delays in MPID cases by capping adjournments before designated courts and making it mandatory for financial establishments to deposit 50% of their total liability before their appeals against recovery orders can be entertained.The state govt said the amendments were necessitated by the growing use of cryptocurrencies, digital coins and other blockchain-based assets in financial frauds, unauthorised deposit schemes and investor scams. Since such assets were not covered under the existing definition of “deposit”, the law was unable to effectively deal with frauds involving virtual digital assets. Under the amendment, the definition of “deposit” in the Act has been expanded to include any Virtual Digital Asset, with the term carrying the same meaning as assigned under Section 2(111) of the Income-tax Act, 2025. This provision was introduced to bring cryptocurrencies, non-fungible tokens (NFTs), and similar digital assets into the tax net.To ensure quicker disposal of cases, the Bill provides that designated courts hearing MPID matters can grant no more than two adjournments. A third adjournment will be allowed only in exceptional circumstances after the court records written reasons.The amendments also seek to discourage financial establishments from filing appeals merely to delay repayment to investors. Under the revised law, no appeal against an order of a designated court will be entertained unless the financial establishment deposits 50% of its aggregate liability with the Competent Authority.
