- India’s ED searched premises linked to CoinDCX and Delta Exchange India on Nov. 4 and Nov. 5.
- The agency alleged customer trades were routed to foreign platforms using USDT and linked accounts.
- CoinDCX said it complies with Indian law and that platform operations remain normal.
CoinDCX raids are now part of a wider Indian investigation into alleged cross-border crypto trading flows involving CoinDCX and Delta Exchange India. India’s Enforcement Directorate said it searched three premises in Bengaluru linked to Neblio Technologies, which operates CoinDCX, and Excelium Technologies, which operates Delta Exchange India, under Section 37 of the Foreign Exchange Management Act. The searches took place on Nov. 4 and Nov. 5, according to the agency. The ED alleged that customer funds and trades were routed abroad for spot transactions, derivatives activity, and products tied to foreign company shares, while both exchanges said operations were continuing.
CoinDCX raids and the ED investigation
The ED said the searches were tied to alleged unauthorized cross-border transactions and possible breaches of FEMA, India’s law governing how money moves in and out of the country. The agency identified the searched entities as Neblio Technologies and Excelium Technologies and said the action covered premises in Bengaluru on two consecutive days in early November.
The agency also said the products under review may raise issues under other Indian laws beyond FEMA. It cited the Securities Contracts Regulation Act of 1956, the SEBI Act of 1992, and the RBI Act of 1934, while adding that the investigation is still under way. CoinDCX was described in the source report as India’s largest crypto exchange by trading volume, while Delta Exchange India was said to have a smaller trading footprint.
Alleged foreign crypto trade routing under investigation
A central claim in the CoinDCX raids is that customer activity was routed to foreign venues through stablecoin transfers. The ED alleged that, for some spot trades, CoinDCX converted customer rupees into USDT and sent that value to overseas exchanges including Binance, KuCoin, and Gate.io in order to fill orders. The agency said this bypassed the normal framework for cross-border money transfers.
The ED also alleged that some of this activity relied on an account in the name of a Costa Rica-based entity that it described as a paper entity. According to the agency, the trades were actually carried out directly from CoinDCX through API connections. These allegations are part of the broader case that the platform enabled foreign execution while customers were trading through an India-facing service.
CoinDCX raids and derivatives activity
The ED said futures and options activity followed a similar pattern. It alleged that when a user opened a derivatives position on CoinDCX, a matching position was opened on a foreign platform through an account linked to a Costa Rica-based group entity. The agency named Binance, KuCoin, Bybit, and Gate.io as the platforms involved in these mirrored trades.
When the user closed the position on CoinDCX, the foreign trade was also closed, according to the ED, with settlement taking place abroad. The agency further alleged that tokenized stock trading linked to companies such as Apple, Google, and Tesla was effectively derivatives trading on Hyperliquid. In that description, CoinDCX again converted customer funds into USDT and opened and closed matching positions one for one.
Delta Exchange India and CoinDCX raids
The ED said the volume tied to each of the three CoinDCX flows it described reached tens of billions of rupees. It also alleged that CoinDCX maintained enterprise trading accounts on foreign crypto platforms and held crypto assets there in contravention of FEMA. The agency added that CoinDCX paid billions of rupees in transaction fees to those platforms and recorded those payments as business expenses.
For Delta Exchange India, the ED said a large part of the exchange’s derivatives and tokenized-share activity was routed through CoinDCX and then executed on foreign platforms such as Binance, KuCoin, Gate.io, and Bybit. The agency estimated these cross-border transactions at several tens of billions of rupees and said it is also examining billions of rupees that Delta allegedly sent to associate entities abroad.
Exchange responses after CoinDCX raids
CoinDCX said in an X post that ED officials visited its Bengaluru office on Nov. 4 as part of what it called a routine inquiry. The exchange said it fully cooperated with the process and stated that it operates in strict compliance with applicable Indian laws, including FEMA, while also meeting KYC, AML, and reporting obligations.
CoinDCX also said trading, deposits, and withdrawals remained fully operational. The source report said Delta denied any cross-border transfers of virtual digital assets. It also noted that neither exchange had responded to CoinDesk’s request for comment before publication time, even though both had mentioned the visits publicly.
Conclusion
The CoinDCX raids have brought fresh attention to how Indian crypto platforms may have handled access to foreign trading venues. The ED alleges that CoinDCX and Delta Exchange India enabled cross-border activity tied to spot trading, derivatives, and tokenized-share products, with USDT and linked foreign accounts playing a key role. The agency also said some of Delta’s activity was routed through CoinDCX before reaching overseas platforms. CoinDCX has denied wrongdoing by asserting compliance with Indian law and keeping services live, while Delta has denied cross-border virtual asset transfers. With the ED citing FEMA and other laws, the case now appears set to remain under regulatory scrutiny.
Disclaimer
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from CryptoNewsBytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.
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