Bitbns, an Indian cryptocurrency exchange, has acknowledged that some of its funds were compromised in February 2022, following allegations that it concealed a $7.5 million hack from its users. BitBNS CEO Gaurav Dahake made the revelation during an hour-long AMA session.
Dahake said that the incident was not an abnormal scenario and that it was handled internally without affecting the users’ funds or operations. He further alleged that law enforcement officials encouraged him not to publicize the incident.
“Law enforcement advised us that the users should be educated about the incident only after the investigation is completed or reaches a dead end,” Dahake said, adding that some funds were retrieved with the help of law enforcement agencies and other exchanges.
Exposed by a Youtuber
On March 1, 2023, ZachXBT, a notable crypto researcher and scam hunter, reported the hack on Twitter. He shared images of internal Bitbns chats and emails that revealed indications of a security breach and fund transfers to unknown wallets.
Let’s call out the crypto exchange @bitbns for hiding a $7.5m hack from their users on February 1 2022 and then proceeding to tell them it was “system maintenance”
— ZachXBT (@zachxbt) February 28, 2023
0x24f361E1eeEdF29fd6D724C9393132D61c51ebB1 pic.twitter.com/a3aBqlgW0z
ZachXBT accused Bitbns of deceiving its users about system maintenance and server difficulties while surreptitiously attempting to recoup lost funds. He further claimed that Bitbns manipulated the market by using its own coin, BNS, to increase its volume.
Bitbns refuted ZachXBT’s claims, claiming he was disseminating misleading information based on inadequate data. According to the exchange, it has taken legal action against him for slander and cybercrime.
The heist has prompted concerns about Bitbns’ security and transparency, despite the fact that it claims to be India’s largest crypto exchange, with over 3 million customers. It also comes at a time when India is dealing with regulatory ambiguity around cryptocurrencies and the possibility of a ban on private digital assets.
