The Enforcement Directorate (ED) conducted search operations at three premises in Bengaluru associated with cryptocurrency exchanges CoinDCX and Delta Exchange. The actions, carried out on November 4 and 5 by the ED’s Bengaluru Zonal Office, are part of a probe into suspected large-scale violations of the Foreign Exchange Management Act (FEMA).
The investigation targets Neblio Technologies Private Limited, which operates CoinDCX, and Excelium Technologies Private Limited, the operator of Delta Exchange India. The federal financial watchdog initiated the inquiry following intelligence regarding unauthorized cross-border financial transactions amounting to thousands of crores of rupees.
Allegations of Bypassing Forex Regulations
Investigating officers claim that both platforms allegedly facilitated the conversion of customer deposits in Indian rupees into the stablecoin Tether (USDT). This USDT was then reportedly routed to overseas exchanges, including Binance, KuCoin, Gate.io, and Bybit, to execute trades. This mechanism is suspected of effectively bypassing India's established foreign exchange payment architecture.
ED officials further allege that CoinDCX and Delta Exchange offered spot cryptocurrency trading, futures and options in digital assets, and even trading in tokenized stocks of foreign companies like Apple, Google, and Tesla, all without the necessary regulatory approvals.
CoinDCX and Overseas Accounts
The investigation revealed that CoinDCX reportedly maintained enterprise trading accounts on foreign crypto platforms, holding digital assets abroad in contravention of FEMA provisions. The agency also noted that transaction fees worth hundreds of crores of rupees were allegedly paid to foreign exchanges in USDT.
Delta Exchange's Scrutiny
In the case of Delta Exchange India, the ED alleged that a significant portion of its futures, options, and tokenized stock transactions were routed through CoinDCX for execution on overseas platforms such as Hyperliquid. Funds transferred by Delta Exchange India to its offshore associate entities are also currently under scrutiny by the agency.
Broader Regulatory Concerns
Beyond FEMA violations, the ED stated that the products offered by both entities are under examination for potential non-compliance with other key financial regulations. These include the Securities Contracts (Regulation) Act, 1956, the SEBI Act, 1992, and the RBI Act, 1934.
CoinDCX Responds
Responding to the development, CoinDCX issued a statement acknowledging the ED officials' visit to its Bengaluru office as a routine inquiry. The exchange affirmed its full cooperation with the agency, asserting that all operations—including deposits, trading, and withdrawals—remain fully functional and compliant with FIU-IND regulations and applicable Indian laws.
"Officials from the Enforcement Directorate visited our Bengaluru office as part of a routine enquiry on 4th November. We fully cooperated with the authorities and provided all necessary information and assistance. As an entity registered with FIU-IND, we regularly assist law enforcement agencies with their inquiries. We operate in strict compliance with all applicable Indian laws, including FEMA (1999), and also adhere to all KYC, AML and reporting obligations. Please note that all activities on the CoinDCX platform, including trading, deposits and withdrawals, remain fully operational, and we remain committed to the highest standards of governance," read the statement shared on social media.