The Enforcement Directorate (ED) conducted raids at three premises in Bengaluru on November 4 and 5 as part of its investigation into suspected large-scale violations of foreign exchange regulations involving cryptocurrency platforms CoinDCX and Delta Exchange. According to the ED's latest post on X, the agency alleges that both companies routed transactions worth thousands of crores of rupees through overseas crypto exchanges. The raids targeted Neblio Technologies Pvt. Ltd., which operates CoinDCX, and Excelium Technologies Pvt. Ltd., the operator of Delta Exchange India. The investigation centers on alleged unauthorised cross-border crypto derivatives and tokenised stock transactions that bypassed FEMA's cross-border payment framework. As per the ED, both platforms offered customers spot trading in cryptocurrencies, futures and options contracts, as well as trading in tokenised stocks of foreign companies, without the requisite authorisation. The platforms were openly advertising trading in tokenised stocks of foreign entities despite not being authorised to do so.
The ED's Bengaluru Zonal Office conducted searches at three premises linked to Neblio Technologies Pvt. Ltd. and Excelium Technologies Pvt. Ltd. These searches were carried out on November 4 and 5 under Section 37 of the Foreign Exchange Management Act (FEMA), 1999. The searches were conducted in connection with alleged unauthorised cross-border transactions involving crypto derivatives and real-world asset (RWA) tokens. According to the ED, the searches uncovered enterprise trading accounts on overseas platforms holding crypto assets, allegedly in violation of FEMA provisions. The agency's investigation is ongoing, and the allegations have not been proven. The raids specifically focused on how these platforms, run by Neblio Technologies and Excelium Technologies, might have handled money moving out of India. The evidence gathered during the search revealed large-scale contraventions of FEMA, 1999 in the above products of the platform.
The ED investigation revealed that CoinDCX allegedly converted customers' rupee deposits into USDT and transferred the funds to overseas exchanges including Binance, KuCoin, Gate.io and Bybit to execute spot crypto trades. The agency described what it called "double hop" spot trading transactions on CoinDCX: a user deposits Indian rupees on the platform, places an order to buy a crypto token, the rupees are converted into the stablecoin USDT, and the USDT is sent to foreign exchanges where the order is executed. These transactions were allegedly routed through accounts held in the name of a Costa Rica-based entity, which the agency described as a "paper entity". The investigation further revealed that actual transactions were being carried out directly by CoinDCX through application programming interfaces (APIs), with the volume of such cross-border spot transactions estimated to run into thousands of crores of rupees. The ED also alleged that CoinDCX facilitated cryptocurrency futures and options trades by opening corresponding positions on overseas exchanges, including Binance, KuCoin, Bybit and Gate.io, with these positions linked to customer trades on the Indian platform and settlements taking place on the overseas exchanges. The platforms were using stablecoins such as USDT to undertake derivative trading and tokenised stock trading in foreign-based crypto trading platforms.
The ED also flagged trading in tokenised stocks of foreign companies such as Apple, Google and Tesla, which were derivative positions executed on Hyperliquid, a foreign-based decentralised crypto trading platform, rather than actual purchases of the underlying shares. According to the ED, CoinDCX paid hundreds of crores in transaction fees to foreign exchanges through USDT, bypassing the prescribed foreign exchange framework. In the case of Delta Exchange India, the ED alleged that a substantial portion of its futures and options and tokenised stock transactions was routed through CoinDCX, which subsequently executed them on overseas platforms. The agency also found that hundreds of crores of rupees were transferred by Delta Exchange India to its overseas associate entities, with these transfers now under investigation. The cross-border transactions involved several thousand crores of rupees, as per the ED's latest findings. The search operations also revealed that hundreds of crores are being transferred by Delta Exchange India to its associate entities located in foreign countries, which is under investigation.
The ED investigation falls under FEMA 1999, specifically targeting large-scale unauthorized cross-border financial transactions involving crypto token derivatives and Real World Asset (RWA) tokens. According to the ED, the agency is examining whether these platforms routed thousands of crores in customer transactions through overseas exchanges using USDT, effectively bypassing the foreign exchange management framework. The ED has also alleged that the products offered by both platforms were prima facie being examined for possible violations of the Securities Contracts (Regulation) Act, 1956, the SEBI Act, 1992, and the RBI Act, 1934. This represents a significant enforcement action against major cryptocurrency platforms operating in India, with the investigation still ongoing as officials check if these actions broke any major financial laws in India. The ED is examining the regulatory compliance of products offered by both platforms under multiple laws, with further investigation underway.
