Key Takeaways
- ED officers searched three Bengaluru premises tied to CoinDCX and Delta Exchange India on Nov. 4 and 5.
- The ED alleges rupee deposits became USDT sent to Binance, Kucoin and Bybit through a Costa Rica firm.
- Delta Exchange India denies any cross-border transfers, and CoinDCX has not yet commented on the probe.
The Searches
The ED said its Bengaluru office searched three premises tied to Neblio Technologies, the parent of CoinDCX, and Excelium Technologies, which operates Delta Exchange India, between Nov. 4 and Nov. 5. The agency acted under the Foreign Exchange Management Act (FEMA), India’s law on cross-border money flows. An official circular read as follows:
[The case involves] large-scale unauthorised cross-border financial transactions involving crypto token derivatives and real-world asset tokens.
The ED further added that the trades in question ran into thousands of crores of rupees. One crore equals 10 million rupees, while 1 US dollar is equal to roughly 95 rupees.
How the Alleged Routing Worked
According to the investigation team, CoinDCX users deposited rupees that were converted into stablecoins, mostly the dollar-pegged token USDT, and then sent to overseas platforms including Binance, Kucoin, Gate.io and Bybit (thereby sidestepping India’s forex rules).
For spot trades, the ED claims CoinDCX used an account opened in the name of a Costa Rica-based company to send USDT abroad. The agency described that company as a mere “paper entity” and alleged the trades were actually executed directly through CoinDCX’s application programming interfaces (APIs).
The ED made similar claims about CoinDCX’s futures and options (F&O) product. It alleged that when users placed orders, CoinDCX opened matching positions on foreign platforms and settled them overseas. It also claimed CoinDCX’s tokenized-stock trading ran through Hyperliquid, a decentralized trading platform, and that the exchange paid hundreds of crores in fees to foreign platforms in stablecoins.
Delta Exchange India faces related claims. The ED alleged that much of Delta’s derivatives and tokenized-stock flow passed through CoinDCX before reaching foreign venues, and that Delta sent hundreds of crores of rupees to overseas associate entities.
The agency added that both firms’ products appeared to have breached rules set forth by the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India.
The Exchanges Respond
Delta Exchange India claims it is cooperating “fully” with officials, providing them with all of the information they have sought. In a post on X, the exchange noted:
Delta Exchange India is operating business as usual with no disruptions, in accordance with applicable law. Trading, deposits and withdrawals are all functioning smoothly, and user funds remain secure in Indian banks. We cooperated fully with the officials and provided the information that they sought. We remain committed to extending our support and cooperation as may be required.
CoinDCX, on the other hand, has not issued a statement at press time. Moreover, none of the allegations against the two entities have been proven.
In any case, the raids add to a rough few weeks for CoinDCX because just last month, Bitcoin.com News reported that the exchange had admitted to a $16M hit after its CEO dismissed suspicious transfers.
Part of a Wider Clampdown
The searches are the latest step in a broader ED push against crypto platforms. Days earlier, the agency opened a probe into Mudrex, Saber.money, and the decentralized finance (DeFi) protocol Instadapp and its platform Fluid over alleged cross-border transfers of more than $525M (₹4,940 crore). In June, it searched six premises linked to Transak, Carret, Xpat, Onramp.money and Onmeta.
The ED says its investigations are ongoing and the key questions are now whether the agency moves to freeze assets or summon executives, and whether securities regulator SEBI opens its own case over the derivatives and tokenized-stock products.
