India’s Enforcement Directorate searched premises linked to CoinDCX and Delta Exchange India on Nov. 4 and 5 as part of an investigation into alleged unauthorized cross-border crypto transactions and possible breaches of India’s foreign exchange rules under FEMA.
The agency claims the exchanges used stablecoins and foreign platforms to execute customer trades outside India. Both companies said their services were operating normally after the searches, while disputing key parts of the allegations.
What the ED alleges
According to the Enforcement Directorate, CoinDCX routed customer orders to overseas platforms by converting rupees into USDT and then using those funds to complete trades abroad. Investigators said the activity covered spot trading as well as derivatives and tokenized-stock products, and involved volumes worth tens of billions of rupees.
The agency also alleged that CoinDCX used an account in the name of a Costa Rica-based entity for some of this activity. That entity was described by the ED as a paper company, while the trades were said to have been executed from CoinDCX through APIs.
Claims around derivatives and tokenized shares
For futures and options, the ED said CoinDCX mirrored customer positions on a foreign platform, effectively creating corresponding positions outside India. In the agency’s account, tokenized trading tied to shares such as Apple and Google followed a similar pattern: customer funds were converted into USDT and matching positions were opened abroad.
The ED further claimed that CoinDCX maintained enterprise trading accounts on foreign platforms and paid billions of rupees in transaction fees that were booked as business expenses. It said the use of stablecoins in those payments contravened FEMA.
Why Delta Exchange India is part of the probe
The Enforcement Directorate said Delta Exchange India offered comparable products and that a significant share of its derivatives and tokenized-stock activity was routed through CoinDCX to overseas venues. On that basis, the agency alleged FEMA violations involving billions of rupees.
The searches covered premises linked to both exchanges, and the ED said its investigation into the cross-border transactions and related activity is continuing.
How the exchanges responded
CoinDCX said its operations remained normal after the searches and maintained that it complies with Indian law. Delta Exchange India also said business was continuing as usual.
Delta separately denied carrying out any cross-border transfers of virtual digital assets. The companies’ statements push back against the ED’s account, and the allegations have not been resolved in the material released so far.
What comes next
At this stage, the confirmed next step is the continuation of the Enforcement Directorate’s investigation. The case centers on whether the use of USDT, foreign trading platforms, mirrored offshore positions and related fee payments amounted to unauthorized cross-border transactions under India’s foreign exchange framework.
No enforcement outcome beyond the searches was described in the report. For now, the key facts on the record are the ED’s allegations, the dates of the searches, and the exchanges’ denials and compliance claims.
Source: www.coindesk.com