India Searches CoinDCX and Delta Exchange Over Alleged Offshore Trades

India's financial crimes agency, the Enforcement Directorate (ED), searched three premises linked to domestic crypto exchanges CoinDCX and Delta Exchange in Bengaluru on November 4 and 5, the agency announced on November 12 ¹. The investigation targets Neblio Technologies Private Limited, which operates CoinDCX, and Excelium Technologies Private Limited, the operator of Delta Exchange, over alleged violations of the Foreign Exchange Management Act (FEMA) ¹.

According to the ED, the exchanges executed unauthorized cross-border transactions running into hundreds of millions of dollars through crypto derivatives and tokenized foreign equities ¹. The agency alleged that CoinDCX converted domestic user rupee deposits into $USDT and routed spot and derivative trades through API connections to overseas exchanges, including Binance, KuCoin, Bybit, and Gate.io ¹. These trades allegedly operated through accounts registered to a Costa Rican group entity characterized by the agency as a paper company ¹. The regulator further claimed that orders for tokenized foreign shares, such as Apple, Google, and Tesla, were executed as derivative positions on the decentralized exchange Hyperliquid ¹.

Agency Allegations and Exchange Responses

The ED also alleged that CoinDCX maintained corporate accounts on overseas platforms and paid tens of millions of dollars in fees in USDT, bypassing cross-border remittance controls ¹. Investigators noted that a substantial portion of Delta Exchange's derivative trades ran through CoinDCX, alleging Delta Exchange transferred tens of millions of dollars to foreign affiliate entities in possible breach of FEMA, securities rules, and central banking regulations ¹. The inquiry builds on broader regulatory scrutiny across Indian crypto operators, following earlier investigations by India's ED into platforms such as Mudrex and Instadapp ¹.

Both exchanges pushed back against the claims in statements on November 6 ¹. CoinDCX characterized the ED's presence as a "routine enquiry" and stated it operates in strict adherence to domestic regulations, maintaining anti-money laundering controls and compliance with India's Financial Intelligence Unit (FIU-IND) ¹. Delta Exchange stated that its operations rely on a rupee-settled platform for domestic users, does not engage in cross-border transfers of virtual digital assets, and has maintained FIU registration since 2023 ¹. Both platforms stated that deposits, withdrawals, and trading services remain active ¹. At the time of writing, USDT traded at $0.9988 amidst broader market softness.