Maharashtra has proposed an amendment to the Maharashtra Protection of Interest of Depositors (MPID) Act to address financial frauds involving cryptocurrencies and other virtual digital assets (VDAs). The bill aims to bring crypto-linked fraudulent schemes within the scope of the existing depositor protection framework.
It would allow authorities to identify, attach and recover digital assets associated with financial offences. The proposal also includes measures intended to improve the speed and effectiveness of legal proceedings in such cases.
The proposed amendment seeks to update the MPID Act to reflect the growing use of virtual digital assets in financial transactions and investment schemes. Under the bill, cryptocurrencies and other VDAs would be recognised as recoverable property when linked to offences covered by the Act.
This change is expected to provide enforcement agencies with a clearer legal basis to pursue assets held in digital form. The amendment is designed to address situations where fraudulent operators use crypto assets to store or move funds obtained from depositors.
A key feature of the proposal is the inclusion of VDAs within the definition of assets that can be attached and recovered by authorities. This would place digital assets alongside other forms of property that may be seized during investigations into financial misconduct.
The approach aims to ensure that technological changes in financial markets do not create gaps in asset recovery processes. By expanding the recoverable asset base, the state seeks to improve outcomes for affected investors and depositors.
The amendment is primarily focused on strengthening investor protection mechanisms in cases involving fraudulent deposit schemes. Digital assets have become increasingly visible in financial markets, creating new challenges for regulators and enforcement bodies handling fraud investigations.
Bringing crypto-related activities under the MPID framework could help authorities respond more effectively when investor funds are diverted into virtual asset holdings. The proposal reflects a broader effort to align legal protections with emerging forms of financial activity and investment products.
The bill also includes provisions aimed at improving the efficiency of recovery and legal proceedings under the Act. Delays in financial fraud cases can affect the ability of authorities to recover assets and return value to affected parties.
By streamlining certain procedural aspects, the state intends to strengthen the overall enforcement framework governing depositor protection. Faster processes may also assist agencies in acting more quickly when dealing with assets that can be transferred or converted through digital networks.
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Maharashtra’s proposed amendment to the MPID Act represents an effort to address the growing intersection between financial fraud and digital assets. The bill would classify cryptocurrencies and other VDAs as recoverable property under the law, enabling authorities to pursue and recover such assets when linked to offences.
It also introduces measures intended to improve the speed and effectiveness of trial and recovery processes. The proposal highlights the state’s focus on enhancing depositor safeguards while adapting existing legislation to evolving financial technologies.
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Published on: Jul 3, 2026, 11:16 AM IST
Akshay Shivalkar
Akshay Shivalkar is a financial content specialist who strategises and creates SEO-optimised content on the stock market, mutual funds, and other investment products. With experience in fintech and mutual funds, he simplifies complex financial concepts to help investors make informed decisions through his writing.
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