From CryptoPotato · By Chayanika Deka
India’s Enforcement Directorate (ED) has searched premises linked to CoinDCX and Delta Exchange India over alleged violations of foreign exchange rules involving unauthorized cross-border crypto transactions.
The searches took place on November 4 and 5, when officials visited three premises in Bengaluru connected to Neblio Technologies, the company behind CoinDCX, and Excelium Technologies, which operates Delta Exchange India.
ED Flags Alleged FEMA Violations Worth Billions
The investigation is being conducted under Section 37 of the Foreign Exchange Management Act (FEMA), 1999, which governs cross-border financial transactions. According to the ED, both exchanges allegedly moved customer funds overseas to facilitate derivatives trading and exposure to tokenized shares of foreign companies without the required authorization.
The agency outlined three main routes through which CoinDCX allegedly handled these transactions. For certain spot trades, the exchange reportedly converted customers’ rupees into USDT and transferred the stablecoins to overseas platforms, including Binance, KuCoin and Gate.io, to execute orders. The ED alleged that these transactions bypassed India’s prescribed foreign exchange framework and were routed through an account belonging to a Costa Rica-based entity that it described as a paper company.
The agency claimed the trades were actually executed directly through CoinDCX using application programming interfaces (APIs). A similar arrangement allegedly existed for futures and options trading, where customer positions on the crypto exchange were mirrored one-for-one on foreign exchanges such as Binance, KuCoin, Bybit and Gate.io.
The ED also questioned CoinDCX’s tokenized stock offerings, which included exposure to companies such as Apple, Google and Tesla. It alleged that these products were actually derivatives trades executed on Hyperliquid, and customer funds were converted into USDT before matching positions were opened overseas. The agency said each of the three transaction channels involved tens of billions of rupees.
It also alleged that CoinDCX maintained enterprise accounts on foreign crypto exchanges, held crypto assets through them, and paid billions of rupees in transaction fees. The agency said these payments, made through stablecoins such as USDT and recorded as business expenses, violated FEMA requirements.
Delta Exchange India is also part of the probe. The ED said the platform offered spot trading, futures, options and tokenized shares of foreign companies. However, investigators allegedly found that much of its derivatives and tokenized stock trading was routed through CoinDCX, which then executed the orders on overseas platforms. The agency put the value of these transactions at several tens of billions of rupees and is separately examining billions of rupees Delta allegedly sent to overseas associate entities.