cryptocurrency exchanges
The Delhi High Court on Thursday sought responses from the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), and other concerned authorities regarding a plea addressing the ongoing financial crisis at BitBNS, one of India’s leading cryptocurrency exchanges.
The court has scheduled the next hearing for April 4.
The petition, filed by several users of BitBNS, calls for urgent judicial intervention to protect investors. It urges the court to direct SEBI, the Union of India, the Ministry of Finance, RBI, and the Ministry of Electronics and IT to develop a regulatory framework for cryptocurrency exchanges. The primary aim is to safeguard users from financial fraud, cyberattacks, and mismanagement by digital asset service providers.
The plea further seeks the establishment of a Special Investigation Team (SIT) under the Central Bureau of Investigation (CBI) to probe BitBNS. The petitioners have requested an FIR to be lodged and a thorough investigation to be conducted into alleged financial irregularities, including fund mismanagement and operational failures.
Filed by advocates Dinesh Jotwani, Shivalika Midha, Shruti Singh, Bhargav Baisoya, and Aniket Sahu, the plea highlights that since a reported cyberattack in February 2022, users have been unable to withdraw funds from their BitBNS wallets. This situation has led to severe financial distress, with many users facing hardships as they struggle to access their investments.
The petitioners alleged that numerous complaints about withdrawal delays and discrepancies in wallet balances were ignored by the exchange. Despite repeated appeals, BitBNS has failed to address users’ concerns, leaving significant amounts of funds inaccessible.
Additionally, users reported that portfolio values and wallet balances did not align with prevailing market rates, exacerbating financial losses.
According to the plea, attempts to seek legal recourse, including filing complaints with the National Cyber Crime Portal, yielded no results due to jurisdictional issues and a lack of regulatory clarity on virtual digital assets (VDAs). The petition underscores the need for better regulatory measures and oversight to protect investors in India’s growing cryptocurrency market.
The petitioners have requested the court to issue an order for BitBNS and its directors to immediately lift withdrawal restrictions, release the withheld funds, and permit express INR withdrawals. They also emphasized the urgent need for government agencies to investigate the matter thoroughly and establish transparent guidelines for VDA platforms to ensure accountability and compliance.
With the next hearing set for April, the plea marks a critical push for stricter regulations and oversight in the cryptocurrency sector in India.
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