The Delhi High Court has called upon the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) to address a petition concerning the alleged financial crisis at BitBNS, an Indian cryptocurrency exchange platform. The platform has recently faced scrutiny following user reports of frozen withdrawals, prompting a plea for stringent cryptocurrency regulation and an investigation into the exchange’s operations.
Filed by 16 distressed users of BitBNS, the petition demands the appointment of a Special Investigation Team (SIT) or the Central Bureau of Investigation (CBI) to delve into the platform’s financial dealings and alleged mishandling of user funds. The plea highlights a desperate need for a more robust regulatory framework for cryptocurrencies and virtual digital assets (VDAs) in India, citing the current lack of regulations as a significant risk factor for fraud, financial losses, and mismanagement.
During the court proceedings, the petitioners’ counsel accused BitBNS of compromising financial and psychological well-being of its users by allegedly concealing a cyberattack in February 2022 under the pretense of ‘system maintenance’. This breach reportedly led to the illicit transfer of user funds abroad, intensifying the call for accountable governance within the cryptocurrency sphere.

Justice Sachin Datta, presiding over the case, raised queries about the competent authorities to undertake the investigation, with the counsel affirming that agencies like the Enforcement Directorate (ED) and CBI are well-equipped for this task. The court has subsequently instructed SEBI and RBI, among others named in the petition, to verify these allegations and has scheduled a follow-up hearing on April 4.
The petition outlines several severe issues faced by BitBNS users, including prolonged delays in fund withdrawals and discrepancies in portfolio values that do not reflect market trends, causing significant distress among investors. Despite numerous complaints and a collective grievance filed to the National Cyber Crime Portal, the petitioners argue that their efforts have been stymied by jurisdictional and infrastructural limitations, leading them to seek judicial intervention from the Delhi High Court.
The demands laid out in the petition include the establishment of a comprehensive regulatory framework for cryptocurrencies by SEBI, RBI, the Union Finance Ministry, and the Ministry of Electronics and Information Technology (MEITY). It also calls for an in-depth investigation by an SIT or CBI into BitBNS’s alleged financial irregularities and operational shortcomings, the lifting of withdrawal restrictions, and compensation for users who have suffered due to the platform’s mismanagement.