India’s financial crime agency searched three addresses linked to companies operating CoinDCX and Delta Exchange India over allegations that customer transactions were routed overseas without authorization.
India’s Enforcement Directorate (ED) searched three addresses in Bengaluru on November 4 and 5 linked to Neblio Technologies, which operates CoinDCX, and Excelium Technologies, which operates Delta Exchange India. The agency said the investigation was being conducted under FEMA, the law regulating foreign exchange transactions.
According to the ED, CoinDCX converted customers’ rupees into USDT and sent them to overseas platforms for some transactions. Users’ futures positions were matched one-to-one on platforms such as Binance, KuCoin, Bybit and Gate.io. Transactions linked to the shares of companies such as Apple, Google and Tesla were allegedly carried out as derivatives trades on Hyperliquid rather than through the purchase of actual shares.
ED allegations cover transactions worth billions of rupees
The ED estimated that each of these three transaction flows involving CoinDCX was worth tens of billions of rupees. The agency also alleged that the exchange held assets in institutional accounts on foreign crypto platforms and paid those platforms billions of rupees in transaction fees.
The ED said Delta Exchange India also offers spot, futures and products linked to shares of foreign companies, and alleged that most derivatives and share-linked transactions were routed through CoinDCX to overseas platforms. Cross-border transactions involving Delta reportedly reached several tens of billions of rupees, and billions of rupees sent by the company to related entities abroad are also being examined.
The ED said the products may have violated securities and central bank regulations as well as FEMA. It said the investigation is ongoing.
CoinDCX and Delta respond
CoinDCX described the visit to its Bengaluru office as part of a routine review and said it was cooperating with the authorities. The company said it complies with Indian law and that trading, deposits and withdrawals are continuing as normal.
Delta Exchange India also said it was continuing its operations as usual and that user funds were held at banks in India. The company said it had not transferred virtual digital assets overseas in any form and that it has been a reporting entity registered with India’s Financial Intelligence Unit since 2023.
Not investment advice.