India's Enforcement Directorate (ED) searched three premises in Bengaluru linked to CoinDCX and Delta Exchange India on Nov. 4 and 5, alleging that the exchanges routed users' trades to offshore platforms including Binance, Bybit, and KuCoin. The agency acted under the Foreign Exchange Management Act (FEMA), India's law governing cross-border money flows.
Alleged Routing Through Offshore Platforms
According to the ED, CoinDCX users deposited rupees that were converted into stablecoins, mostly the dollar-pegged USDT, and then sent to overseas platforms including Binance, KuCoin, Gate.io, and Bybit, thereby sidestepping India's forex rules. For spot trades, the agency claims CoinDCX used an account opened in the name of a Costa Rica-based company to send USDT abroad. The ED described that company as a mere "paper entity" and alleged the trades were actually executed directly through CoinDCX's application programming interfaces (APIs).
The ED made similar claims about CoinDCX's futures and options (F&O) product. It alleged that when users placed orders, CoinDCX opened matching positions on foreign platforms and settled them overseas. It also claimed CoinDCX's tokenized-stock trading ran through Hyperliquid, a decentralized trading platform, and that the exchange paid hundreds of crores in fees to foreign platforms in stablecoins.
Delta Exchange India faces related claims. The ED alleged that much of Delta's derivatives and tokenized-stock flow passed through CoinDCX before reaching foreign venues, and that Delta sent hundreds of crores of rupees to overseas associate entities. The agency added that both firms' products appeared to have breached rules set forth by the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India.
The ED said the trades in question ran into thousands of crores of rupees. One crore equals 10 million rupees, while 1 US dollar is equal to roughly 95 rupees.
Exchanges Respond
Delta Exchange India said it is cooperating "fully" with officials and providing all requested information. In a post on X, the exchange stated: "Delta Exchange India is operating business as usual with no disruptions, in accordance with applicable law. Trading, deposits and withdrawals are all functioning smoothly, and user funds remain secure in Indian banks. We cooperated fully with the officials and provided the information that they sought. We remain committed to extending our support and cooperation as may be required."
CoinDCX has not issued a statement at press time. None of the allegations against the two entities have been proven.
The searches add to a rough few weeks for CoinDCX, which last month admitted to a $16 million hit after its CEO dismissed suspicious transfers.
Part of a Wider Clampdown
The searches are the latest step in a broader ED push against crypto platforms. Days earlier, the agency opened a probe into Mudrex, Saber.money, and the decentralized finance (DeFi) protocol Instadapp and its platform Fluid over alleged cross-border transfers of more than $525 million (₹4,940 crore). In June, it searched six premises linked to Transak, Carret, Xpat, Onramp.money, and Onmeta.
The ED says its investigations are ongoing. Key questions now include whether the agency moves to freeze assets or summon executives, and whether securities regulator SEBI opens its own case over the derivatives and tokenized-stock products.
