Large Number Of Affected Investors Doesn't Convert Crypto Dispute Into Public Law Issue: Delhi High Court
The Delhi High Court has held that the mere fact that a large number of investors are affected does not convert an essentially private dispute involving a cryptocurrency exchange into a public law issue warranting exercise of writ jurisdiction.
Dismissing an appeal filed by users of cryptocurrency platform BitBNS, the Court refused to direct a CBI or Special Investigation Team (SIT) probe into the alleged cyber incident and fund mismanagement at the exchange.
A division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tejas Karia upheld a single judge's decision refusing to entertain the writ petition, observing that the dispute arose out of transactions between individual investors and a private cryptocurrency exchange.
"The controversy is, therefore, in nature of a private commercial dispute. The mere fact that a large number of investors may have been affected does not, by itself, transform the dispute into one involving enforceable public law rights," the Court observed.
The appellants, users of the BitBNS cryptocurrency exchange platform, had challenged the single judge's February 11 judgment, contending that the matter involved regulatory inaction, statutory oversight and systemic failure affecting investors across the country.
They sought directions to the Union Government, the Reserve Bank of India and other authorities to frame a regulatory framework for cryptocurrency exchanges, besides seeking a CBI investigation into the alleged financial fraud, cyberattack, fund mismanagement and operational lapses at BitBNS.
They also sought directions for release of their funds and payment of compensation.
Rejecting these submissions, the High Court held that BitBNS and its founders are private entities and do not fall within the definition of "State" under Article 12 of the Constitution.
It further clarified that the taxation of Virtual Digital Assets (VDAs) under the Finance Act, 2022 does not, by itself, render cryptocurrency exchanges amenable to public law scrutiny.
"Respondent Nos. 11 to 13 are private entities, neither created, financed, nor controlled by the State or instrumentalities of the State. Further, the taxation of VDAs under the Finance Act does not render such entities 'State' within the meaning of Article 12 of the Constitution, nor does it, by itself, subject them to public law scrutiny," the Court said.
The Court also found no exceptional circumstances warranting a direction for investigation by the CBI or an SIT.
As regards the prayer seeking release of users' funds and compensation, the bench held that adjudication of such claims would require determination of disputed questions of fact, that require trial and cannot be decided under Article 226 of the Constitution.
Lastly noting that a collective criminal complaint had already been lodged on the National Cyber Crime Portal, the Court observed that the appellants were not without remedies.
As such, it dismissed the appeal.
Appearance: Mr. Dinesh Jotwani, Advocate, Mr. Syed Adil Muneer, AOR and Ms. Sharanya Tripathi, Advocates for Appellants; Mr. Amit Tiwari, CGSC with Ms. Ayushi Srivastava, Mr. Arpan Narwal and Mr. Kushagra Malik, Advocates for UoI. Mr. Abhinav Sharma, Mr. Dipan Sethi and Mr. Snehashish Bhattacharya, Advocates for R-3. Mr. Premtosh K. Mishra, SPP with Mr. Anubhav Upadhyay, Advocate for R-9 (CBI). Mr. Rohan Kothari and Ms. Shivani Pegatraju, Advocates for R-11 to R13.
Case title: Amit Ranjan & Ors. v. Union Of India And Others
Case no.: LPA 393/2026