The Enforcement Directorate (ED) has conducted search operations at three premises in Bengaluru linked to cryptocurrency trading platforms CoinDCX and Delta Exchange as part of an investigation into alleged foreign exchange violations and large-scale cross-border transactions. According to the report supplied, the searches took place on November 4 and 5, 2026, under Section 37 of the Foreign Exchange Management Act (FEMA).
The investigation concerns the operations of Neblio Technologies Private Limited, which runs CoinDCX, and Excelium Technologies Private Limited, associated with Delta Exchange. The agency is examining whether crypto derivatives, tokenised foreign stocks and related services were offered and operated without the regulatory authorisations required under applicable Indian laws.
The alleged transaction volumes run into thousands of crores of rupees. However, the investigation is ongoing, and the allegations should not be treated as established violations or final findings.
ED Examines Alleged Conversion of Indian Rupees Into USDT
According to the report, the ED's enquiries indicated that funds received from users in Indian rupees were converted into Tether (USDT), a stablecoin linked to the US dollar, before being used for transactions on overseas cryptocurrency exchanges.
The foreign platforms named in the report include Binance, KuCoin, Gate.io and Bybit. The alleged arrangement involved converting domestic customers' spot-trading orders into USDT and routing the corresponding transactions to overseas platforms.
Investigators reportedly identified the use of accounts held in the name of a Costa Rica-based entity described in the report as a paper company. The ED is examining whether this structure was used to facilitate cross-border transactions outside the prescribed remittance framework.
The report also states that trading activity on overseas platforms was executed through application programming interfaces (APIs) connected to CoinDCX. The resulting cross-border spot-trading volumes were allegedly worth thousands of crores of rupees.
The central issue under examination is whether the movement of customer funds and the use of overseas accounts complied with India's foreign exchange regulations.
Alleged Mirrored Derivatives Positions on Foreign Exchanges
The investigation also covers futures and options contracts offered to domestic users.
According to the report, the ED found indications that orders placed by Indian customers were mirrored through corresponding positions on overseas exchanges. These positions were allegedly opened through accounts associated with the Costa Rican entity.
Under the arrangement described in the report, when a domestic customer closed a position, the related financial settlement was completed on the overseas platform. Investigators are examining how these transactions were structured and whether the arrangements complied with the applicable regulatory framework.
This part of the investigation is significant because derivative products can involve exposure to overseas markets without the customer directly holding the underlying asset. The legal and regulatory treatment depends on the structure of the product, the entities involved and the manner in which transactions are executed.
Tokenised Foreign Stocks Also Under Investigation
The ED reportedly identified transactions involving tokenised stocks linked to foreign companies, including Apple, Google and Tesla.
The report says these products were offered as synthetic derivatives rather than direct ownership of the underlying shares. Customer funds were allegedly converted into USDT and used to establish corresponding derivative positions on Hyperliquid, a foreign decentralised trading platform.
The agency is examining whether the products and their cross-border execution complied with Indian regulatory requirements. The report places the alleged transaction volumes in this segment at thousands of crores of rupees, although it does not provide a detailed transaction-wise breakdown.
The distinction between tokenised exposure and actual share ownership is important. A product that tracks or derives its value from a company's stock does not necessarily provide the holder with shareholder rights or direct ownership of that company's shares.
Overseas Enterprise Accounts and Transaction Fees Under Scrutiny
The search proceedings reportedly brought CoinDCX's enterprise trading accounts on overseas cryptocurrency platforms under scrutiny. The ED is examining allegations that crypto assets were held through these accounts in a manner that may have violated FEMA provisions.
The agency is also investigating payments made to foreign exchanges as transaction fees. According to the report, these payments amounted to hundreds of crores of rupees and were settled in USDT rather than through conventional banking channels.
Delta Exchange India's operations have also come under examination. The report states that a substantial volume of its derivative contracts and tokenised-stock transactions was routed through CoinDCX before execution on overseas platforms.
It further alleges that Delta Exchange India transferred hundreds of crores of rupees to foreign associate entities. The nature, purpose and regulatory treatment of these transfers remain matters for investigation.
Possible Implications Under FEMA, SEBI and RBI Laws
The ED's scrutiny extends beyond the foreign exchange framework. According to the report, the agency has identified possible concerns under three additional legislative frameworks:
Foreign Exchange Management Act, 1999: The investigation concerns the alleged movement of funds and crypto assets across borders, overseas accounts and payment arrangements.
Securities Contracts (Regulation) Act, 1956: The agency is examining whether certain derivative and tokenised products complied with applicable securities-market requirements.
SEBI Act, 1992: The investigation includes questions about the regulatory status and authorisation of products linked to overseas securities and derivatives.
Reserve Bank of India Act, 1934: The report says the agency is also examining possible concerns under provisions of the RBI framework.
The reference to these laws indicates the breadth of the regulatory questions being examined. It does not, by itself, establish that either platform has been found guilty of violating them.
For businesses operating in digital assets and international financial markets, the case highlights the importance of reviewing transaction structures, overseas counterparties, payment channels and regulatory obligations. A detailed financial investigation and compliance review by Shunyatax can help businesses understand the importance of documenting complex financial flows and maintaining appropriate controls.
Investigation Continues; Allegations Await Further Examination
The ED's searches mark an investigative step in a case involving domestic crypto platforms, overseas exchanges, stablecoin settlements and products linked to international markets.
The key questions include how customer funds were transferred, which entities controlled the overseas accounts, how derivative positions were matched and settled, and whether the products were offered with the necessary regulatory permissions.
The supplied report does not include responses from CoinDCX, Delta Exchange or the overseas platforms named. It also does not provide a final adjudication, penalty order or court finding. The allegations therefore remain subject to further investigation and the applicable legal process.