India Considers Crypto Regulations Amid Bitbns Investor Complaints

India may soon take a major step toward regulating cryptocurrency, as the Delhi High Court has issued notices to the Ministry of Finance (MoF), Reserve Bank of India (RBI), and Securities and Exchange Board of India (SEBI). The notices come in response to a petition filed by victims of the cryptocurrency exchange Bitbns, which has come under fire for allegedly withholding investor funds.

The controversy began in mid-2024 when numerous investors complained about their inability to withdraw funds from Bitbns. Losses reported by victims range from ₹20,000 to ₹1.5 crore. Despite repeated attempts, investors claim their concerns went unanswered. A cybercrime complaint prompted an investigation by Delhi Police, revealing that Bitbns’ founders are untraceable and may have left the country.

The Delhi High Court hearing on January 9, 2025, was presided over by Justice Sachin Datta, who directed MoF, RBI, and SEBI to respond within four weeks. Advocate Dinesh Jotwani, representing the petitioners, highlighted the lack of regulations for cryptocurrencies in India, noting that only the Finance Act 2022 imposes taxes on Virtual Digital Assets (VDAs).

This case could pave the way for comprehensive crypto regulations in India, addressing issues such as investor protection, transparency and operational oversight. The absence of regulations has been a long-standing concern, with incidents like the Bitbns scandal underscoring the urgent need for government intervention.

The outcome of this case could have far-reaching implications for the future of cryptocurrency in India and the safety of millions of investors navigating the unregulated market.

For further details, visit the Delhi High Court’s order here or access the full petition here.

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