{"investigation":{"slug":"bns","entity_name":"BitBNS","trust_score":28,"severity_base":null,"score_modifier":0,"confidence":0.82,"status":"published","content_type":"investigation","summary":"BitBNS (Bitbns) is an Indian cryptocurrency exchange founded in 2017 by Gaurav Dahake, Prashant Singh, and Srikanth Sethumadhavan, operating under Buyhatke Internet Private Limited and headquartered in Bengaluru. In February 2022 the exchange suffered a $7.5 million hack that it concealed from users under the guise of 'system maintenance' for over a year until on-chain investigator ZachXBT publicly exposed the breach in March 2023. The exchange subsequently froze user withdrawals for approximately two years, drawing multiple court actions in India and sustained criticism for withholding customer funds while continuing to accept new deposits.","sections":[{"content":"On March 1, 2023, pseudonymous blockchain investigator ZachXBT publicly alleged that BitBNS had concealed a $7.5 million security breach that occurred on February 1, 2022. ZachXBT's on-chain analysis showed that during what the exchange publicly described as routine 'system maintenance,' large unauthorized withdrawals moved from BitBNS hot wallet address 0x4960 to wallet 0x24f3. The attacker subsequently funneled stolen funds through Tornado Cash, withdrawing in batches of approximately 100 ETH over roughly one year. Following ZachXBT's public disclosure, BitBNS co-founder and CEO Gaurav Dahake acknowledged the breach in a YouTube AMA session, stating the wallet was compromised but claiming it 'coincided with the system maintenance.' Dahake attributed the delayed disclosure to advice from Cyber Crime Bengaluru, asserting that law enforcement had instructed the exchange not to inform users until the investigation was complete or reached a dead end. No regulatory enforcement action against the exchange was announced in connection with the concealment.","heading":"ZachXBT Investigation and Hack Disclosure","sources":[{"url":"https://beincrypto.com/bitbns-questioned-concealment-7-5m-hack/","name":"beincrypto.com","type":"other","credibility":3},{"url":"https://www.coindesk.com/policy/2023/03/02/indian-crypto-exchange-bitbns-says-law-enforcement-advised-against-making-hack-public","name":"coindesk.com","type":"other","credibility":3},{"url":"https://cryptoslate.com/indian-exchange-bitbns-admits-it-was-hacked-for-7-5m-last-february/","name":"cryptoslate.com","type":"other","credibility":3},{"url":"https://bitcoinist.com/bitbns-says-authorities-told-it-to-keep/","name":"bitcoinist.com","type":"other","credibility":3},{"url":"https://cryptodaily.co.uk/2023/03/bitbns-finally-admits-to-covering-up-7-5-million-hack","name":"cryptodaily.co.uk","type":"other","credibility":3}],"severity":"medium"},{"content":"BitBNS suspended INR withdrawals in approximately December 2022, with the freeze extending for over two years. In June 2023 multiple user accounts reportedly showed portfolio balances dropping to zero while the exchange continued accepting new deposits. Users described submitting more than 40 support tickets without resolution. The exchange attributed withdrawal delays to bank account freezes stemming from ongoing legal proceedings — reportedly at least 200 judicial proceedings — and regulatory complications from India's cryptocurrency regulatory environment. The exchange announced in March 2024 that INR withdrawals would resume for 'one million users,' though no follow-up update was provided. Between December 19 and December 24, 2024 the exchange announced processing 541 withdrawals, describing it as the first tangible progress toward resolving the backlog. Trustpilot reviews for the platform reflect a 1.4 out of 5 rating, with approximately 60 percent of reviews rated one or two stars, and multiple users as late as April 2025 reporting withdrawals initiated in November 2024 still showing 'Processing' after more than 60 banking days.","heading":"Prolonged Withdrawal Freeze and User Fund Complaints","sources":[{"url":"https://www.cryptotimes.io/2024/08/22/obscurity-deception-and-unethical-practices-bitbns-is-thy-name/","name":"cryptotimes.io","type":"other","credibility":3},{"url":"https://www.cryptovate.io/bitbns-restores-withdrawals-after-two-years/","name":"cryptovate.io","type":"other","credibility":3},{"url":"https://www.cryptotimes.io/2024/12/25/bitbns-resumes-withdrawals-after-two-years-of-controversy/","name":"cryptotimes.io","type":"other","credibility":3},{"url":"https://www.tradingview.com/news/moneycontrol:33f77c3eb094b:0-crisis-at-bitbns-user-funds-stuck-deep-discounted-crypto-prices-banking-challenges/","name":"tradingview.com","type":"other","credibility":3},{"url":"https://coingeek.com/india-bitbns-exchange-says-delay-in-inr-withdrawals-due-to-blocked-bank-account/","name":"coingeek.com","type":"other","credibility":3},{"url":"https://www.trustpilot.com/review/www.bitbns.com","name":"trustpilot.com","type":"other","credibility":3}],"severity":"medium"},{"content":"In January 2025 sixteen users filed a writ petition before the Delhi High Court against the central government, RBI, and SEBI, seeking a regulatory framework for cryptocurrency exchanges and a special investigation into BitBNS. The petition alleged financial fraud, fund mismanagement, and concealment of the 2022 cyberattack. The petitioners sought a CBI or SIT investigation and immediate release of frozen user funds. On February 11, 2026 Justice Purushaindra Kumar Kaurav dismissed the petitions on constitutional grounds, ruling that BitBNS is a private commercial entity not subject to writ jurisdiction under Article 226 of the Indian Constitution and that courts cannot compel the legislature to enact cryptocurrency regulation. The ruling directed affected investors to pursue compensation through regular civil or criminal courts. Separately, in December 2024 more than 30 users filed a formal legal notice through advocate Aman Rehaan Khan documenting a pattern of alleged service failures. No formal enforcement action by India's Enforcement Directorate under PMLA has been publicly reported in connection with BitBNS as of the time of this investigation.","heading":"Legal and Regulatory Actions","sources":[{"url":"https://inc42.com/buzz/delhi-hc-seeks-responses-from-centre-rbi-sebi-on-bitbns-crypto-crisis/","name":"inc42.com","type":"other","credibility":3},{"url":"https://www.cryptotimes.io/2026/02/25/delhi-hc-rejects-bitbns-pleas-bars-cbi-probe-in-indias-6b-crypto-market/","name":"cryptotimes.io","type":"other","credibility":3},{"url":"https://www.medianama.com/2025/01/223-delhi-high-court-questions-sebi-rbi-on-cryptocurrency-oversight-amid-bitbns-user-complaints/","name":"medianama.com","type":"other","credibility":3},{"url":"https://fountainheadlegal.com/delhi-high-court-questions-sebi-rbi-on-cryptocurrency-oversight-amid-bitbns-user-complaints/","name":"fountainheadlegal.com","type":"other","credibility":3},{"url":"https://www.cryptotimes.io/2024/12/06/bitbns-users-drag-management-to-court-for-justice-exclusive/","name":"cryptotimes.io","type":"other","credibility":3},{"url":"https://www.barandbench.com/news/plea-delhi-high-court-regulation-cryptocurrency-probe-bitbns-crisis","name":"barandbench.com","type":"other","credibility":3}],"severity":"medium"},{"content":"BitBNS was founded in December 2017 in Bengaluru, India, by three IIT Kharagpur graduates: Gaurav Dahake (CEO), Prashant Singh (CTO), and Srikanth Sethumadhavan (UI and Front End). The exchange operates under the registered entity Buyhatke Internet Private Limited. Dahake previously founded several startups including clean energy venture Cleanoventions, push notifications firm InformVisitors, and price comparison portal BuyHatke. The exchange registered 3.2 million users and listed over 300 tokens at its peak. BitBNS is registered with India's Financial Intelligence Unit (FIU-India). Trading volume as of mid-2024 was approximately $1.25 million, significantly below peak levels. The exchange was impacted by the Reserve Bank of India's 2018 ban on cryptocurrency, during which trading volumes fell by approximately 95 percent, and it continued operating with a lean team before recovering following the lifting of the ban in 2020.","heading":"Company Background and Founders","sources":[{"url":"https://yourstory.com/the-decrypting-story/bitbns-cryptocurrency-exchange-india","name":"yourstory.com","type":"other","credibility":3},{"url":"https://www.cryptotimes.io/2024/08/22/obscurity-deception-and-unethical-practices-bitbns-is-thy-name/","name":"cryptotimes.io","type":"other","credibility":3},{"url":"https://coingeek.com/india-bitbns-exchange-says-delay-in-inr-withdrawals-due-to-blocked-bank-account/","name":"coingeek.com","type":"other","credibility":3}],"severity":"medium"},{"content":"BitBNS CEO Gaurav Dahake stated in his March 2023 AMA that following the February 2022 hack, the exchange contacted law enforcement immediately and had traced the person responsible. Dahake indicated that some funds were recovered with assistance from authorities and other exchanges. The attacker's identified laundering route involved Tornado Cash, with assets moved in batches of approximately 100 ETH over approximately one year following the breach. The total amount recovered has not been publicly disclosed, nor has a full accounting of how the $7.5 million loss was distributed across user funds versus exchange reserves been published. The exchange stated it would release full investigation reports upon completion of the investigation.","heading":"Fund Recovery and Partial Hack Mitigation","sources":[{"url":"https://www.coindesk.com/policy/2023/03/02/indian-crypto-exchange-bitbns-says-law-enforcement-advised-against-making-hack-public","name":"coindesk.com","type":"other","credibility":3},{"url":"https://beincrypto.com/bitbns-questioned-concealment-7-5m-hack/","name":"beincrypto.com","type":"other","credibility":3},{"url":"https://watcher.guru/news/zachxbt-uncovers-bitbns-hack-exchange-says-law-enforcement-advised-against-disclosure","name":"watcher.guru","type":"other","credibility":3}],"severity":"medium"}],"timeline":[{"date":"2017-12-14","event":"BitBNS launched in Bengaluru, India, by Gaurav Dahake, Prashant Singh, and Srikanth Sethumadhavan under Buyhatke Internet Private Limited.","source":""},{"date":"2018-04-06","event":"Reserve Bank of India ban on crypto banking services causes 95 percent volume drop on BitBNS.","source":""},{"date":"2020-03-04","event":"Indian Supreme Court lifts RBI banking ban on cryptocurrency; BitBNS volumes recover.","source":""},{"date":"2022-02","event":"BitBNS suffers $7.5 million hack. Exchange publicly describes the platform downtime as routine 'system maintenance.' Stolen funds subsequently laundered through Tornado Cash in batches of approximately 100 ETH.","source":"","date_original":"2022-02-01"},{"date":"2022-12-15","event":"INR withdrawal suspensions begin on BitBNS, affecting thousands of users.","source":""},{"date":"2023-03","event":"ZachXBT publicly exposes the concealed February 2022 hack via on-chain analysis, forcing CEO Gaurav Dahake to confirm the breach in a public AMA. Dahake attributes delayed disclosure to law enforcement advice.","source":"","date_original":"2023-03-01"},{"date":"2023-06-27","event":"Multiple user accounts on BitBNS report portfolio balances dropping to zero. Exchange halts all withdrawals while continuing to accept deposits.","source":""},{"date":"2024-03-13","event":"BitBNS announces INR withdrawals resuming for 'one million users' but provides no follow-up updates.","source":""},{"date":"2024-12-05","event":"Over 30 users file a formal legal notice against BitBNS through advocate Aman Rehaan Khan documenting alleged patterns of service failures and fund withholding.","source":""},{"date":"2024-12-19","event":"BitBNS announces processing of 541 withdrawals between December 19 and December 24, 2024, described as first tangible progress after more than two years.","source":""},{"date":"2025-01-09","event":"Delhi High Court seeks responses from SEBI and RBI on cryptocurrency oversight following writ petition by 16 BitBNS users alleging financial fraud and fund mismanagement.","source":""},{"date":"2026-02-11","event":"Delhi High Court dismisses writ petitions by BitBNS investors under Justice Purushaindra Kumar Kaurav, ruling BitBNS is a 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