ED searches CoinDCX and Delta Exchange India over crypto forex rules

India's Enforcement Directorate searched three Bengaluru premises linked to crypto platforms CoinDCX and Delta Exchange India on 4 and 5 November, initiating a probe into alleged illegal cross-border financial transactions running into thousands of crores of rupees.

Investigators targeted premises belonging to Neblio Technologies, the parent company of CoinDCX, and Excelium Technologies, which operates Delta Exchange India, under the provisions of the Foreign Exchange Management Act. According to the agency, both exchanges facilitated unauthorised spot trading, futures and options, and tokenised foreign stock trading through cryptocurrencies without required regulatory clearances.

How the alleged transactions worked

The Enforcement Directorate said user deposits made in Indian rupees were converted into the USDT stablecoin before being transferred to foreign crypto exchanges including Binance, KuCoin, Gate.io, and Bybit. Agency officials alleged these transactions were structured to bypass domestic foreign exchange regulations governing outward capital flows.

For spot trades, CoinDCX allegedly routed USDT using an account registered under a Costa Rica-based paper entity while executing orders directly via application programming interfaces. Derivatives trading positions were allegedly mirrored on overseas platforms using APIs, with trades settled outside India. Tokenised foreign stock trading was similarly routed to Hyperliquid, a decentralised overseas trading platform, with CoinDCX paying hundreds of crores in transaction fees to foreign platforms using stablecoins.

Investigators stated that Delta Exchange India routed a significant portion of its derivatives and tokenised stock transactions through CoinDCX, while also transferring hundreds of crores of rupees to overseas associate entities. The agency noted that these operations appear to contravene regulations established under the Reserve Bank of India Act, the Securities Contracts (Regulation) Act, and the Securities and Exchange Board of India Act.

ED crackdown on crypto foreign exchange violations

The latest action forms part of a wider effort by Indian enforcement agencies to maintain financial integrity and enforce compliance across digital asset platforms operating within the country. Federal agencies have tightened oversight to prevent illicit capital outflows and protect national financial stability.

Delta Exchange India said in a statement on X that it cooperated fully with visiting officials and provided all requested information. The exchange maintained that it is not involved in any cross-border transfer of virtual digital assets. CoinDCX had not issued an official public statement at the time of publication.