Plea moved in Delhi HC over financial crisis at BitBNS crypto exchange, court seeks stand of respondents

New Delhi: The Delhi High Court on Thursday asked the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI) and other respondents to file their response on a petition seeking urgent intervention from Court regarding a financial crisis impacting users of BitBNS, a major cryptocurrency exchange in India.
The bench of Justice Sachin Datta fixed April 4 for further hearing in the matter.
The petition, filed by several users, sought directions to mandate SEBI, the Union of India, the Ministry of Finance, the Reserve Bank of India, and the Ministry of Electronics and IT to establish a regulatory framework and policies for overseeing cryptocurrency exchanges and transactions to ensure investor protection.
It also requested the formation of a Special Investigation Team (SIT) under the Central Bureau of Investigation (CBI) to file an FIR and conduct a thorough investigation into the financial fraud, cyberattacks, fund mismanagement, and operational lapses at BitBNS.
The petition was filed through advocates Dinesh Jotwani, Shivalika Midha, Shruti Singh, Bhargav Baisoya, and Aniket Sahu.
According to the plea, since a cyberattack in February 2022, BitBNS users have been unable to withdraw their funds from their wallets, leading to significant financial distress and hardship for many families.
The petition highlights that numerous users have endured months-long delays in accessing their legitimate funds, with some being unable to withdraw their investments entirely. Additionally, discrepancies in portfolio values and wallet balances that did not align with market trends have further contributed to financial losses and emotional distress.
Despite repeated complaints and appeals from users, BitBNS has failed to resolve these issues, leaving crores of user funds inaccessible. Attempts by users to seek legal recourse, including filing a joint complaint with the National Cyber Crime Portal, have been unsuccessful due to jurisdictional and infrastructural challenges, the plea stated.
The petitioners emphasised the need for informed engagement with Virtual Digital Assets (VDAs) in India and called for regulatory measures. They also requested the formation of a Special Investigation Team (SIT) and a Central Bureau of Investigation (CBI) inquiry to investigate the fraud and establish guidelines for VDA service providers to ensure transparency and compliance.
The plea seeks directions for government agencies to conduct a thorough investigation into the alleged offences committed against the petitioners and other investors.
It also requests an order for BitBNS and its directors to immediately release the funds of the petitioners and victims, lift the withdrawal restrictions, and allow express INR withdrawals.