New Delhi [India], May 15 (ANI): In an order dated March 4 2025, the Appellate Tribunal under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act (SAFEMA) had set aside the Enforcement Directorate’s (ED) attachment of over ₹29.28 crore belonging to Buy Hatke Internet Pvt. Ltd., the operator of crypto exchange BitBNS.
The order was delivered by Chairman Justice Munishwar Nath Bhandari and Member V. Anandarajan.
The matter originated from an alleged fraud investigation. Accused entities allegedly induced the public to invest money through apps, promising daily or weekly interest, only to allegedly shut down operations and disappear with the funds. The ED registered an Enforcement Case Information Report (ECIR) following cheating charges filed under Section 420 of the IPC.
During the probe, the ED traced funds to one individual who had allegedly deposited approximately ₹19.67 crore into his BitBNS account. The ED alleged these were proceeds of crime and subsequently attached over ₹29 crore from Buy Hatke’s bank account, claiming the exchange was being used for “layering” illicit money.
The Tribunal ruled in favor of the appellant, BitBNS, noting several key factors that undermined the ED’s attachment order:
The Tribunal accepted the appellant’s argument that as a crypto exchange, BitBNS functions solely as a “transaction facilitator.” It provides the technology for buyers and sellers to connect but does not participate in the trade or control the assets once they are purchased or transferred.
Evidence showed that the user, had converted his deposits into Virtual Digital Assets (VDAs) and transferred them out of BitBNS to another platform long before the attachment. Therefore, the “proceeds of crime” were not actually lying with the appellant company.
The Tribunal noted that the user had signed up 2.5 years before the alleged scam and had undergone rigorous KYC (Know Your Customer) protocols, including video verification and geo-tagging. The exchange had no direct or indirect relationship with the 13 entities accused in the primary fraud.
While the alleged illicit deposits totaled ₹19.67 crore, the ED attached over ₹29 crore. The Tribunal remarked that the respondents “could not explain or justify” the attachment of funds over and above the alleged proceeds of crime.
In its final order, the Tribunal stated, “The appellant company was functioning as a transaction facilitator having no control over the use of VDAs by users post-purchase… we find no reason for the respondents to attach the bank account of the appellant company.”
The Tribunal officially set aside the Provisional Attachment Order dated December 21, 2021, and its subsequent confirmation, allowing the appeal by Buy Hatke Internet Pvt. Ltd. (ANI)