India’s Enforcement Directorate has searched premises linked to CoinDCX parent Neblio Technologies and Delta Exchange India operator Excelium Technologies as part of a foreign-exchange investigation into crypto trading flows. The agency said its Bengaluru office carried out searches at three locations on Nov. 4 and 5 under the Foreign Exchange Management Act, or FEMA.
The ED alleges that rupee deposits made by users were converted largely into the stablecoin USDT and then routed to overseas crypto platforms including Binance, Bybit, Kucoin and Gate.io. It described the case as involving large unauthorised cross-border financial transactions tied to crypto derivatives and tokenized-stock style products, with trading volumes running into thousands of crores of rupees.
What the agency alleges
According to the ED, CoinDCX customers deposited rupees that were then converted into stablecoins and sent abroad in a way that bypassed India’s foreign-exchange rules. Investigators said the overseas destinations included Binance, Kucoin, Gate.io and Bybit.
For spot trading, the agency claims CoinDCX used an account opened in the name of a Costa Rica-based company to move USDT offshore. The ED characterized that company as a paper entity and alleged that the resulting trades were executed directly through CoinDCX APIs.
The agency made similar allegations about futures and options activity, saying orders placed on CoinDCX created matching positions on foreign platforms and were settled overseas. It also alleged that CoinDCX’s tokenized-stock trading was routed through Hyperliquid, and that hundreds of crores of rupees in fees were paid to foreign platforms in stablecoins.
Claims involving Delta Exchange India
The ED said Delta Exchange India is also under scrutiny for cross-border activity linked to derivatives and tokenized-stock products. Investigators alleged that a large share of that flow passed through CoinDCX before reaching offshore venues.
The agency further claimed that hundreds of crores of rupees were sent to overseas associates in connection with Delta’s operations. It added that products offered by both firms appeared to conflict with rules overseen by India’s market regulator SEBI and the Reserve Bank of India, though the investigation remains ongoing.
Company response and current operations
Delta Exchange India said it is fully cooperating with the authorities. The company added that trading, deposits and withdrawals continue to operate normally and that user funds remain secure in Indian bank accounts.
CoinDCX had not issued a statement at the time referenced in the source report. The ED’s claims therefore remain the main public account so far of how the agency believes the trading flows were structured.
Broader enforcement backdrop
The searches come during a wider ED crackdown on crypto businesses over alleged cross-border transfers. The agency said its investigation is continuing, and the next confirmed procedural steps could include summoning executives or freezing assets.
The report also said possible follow-on action could involve SEBI in relation to derivatives and tokenized-stock offerings. For now, the confirmed development is the Nov. 4-5 search operation and the ED’s allegation that domestic rupee-funded crypto activity was routed to foreign venues through stablecoin transfers.
Source: news.bitcoin.com