India's Enforcement Directorate Searches CoinDCX and Delta Exchange Over Alleged Offshore Routing of Crypto Trades

India's Directorate of Enforcement (ED) said on 6 November 2026 that its Bengaluru Zonal Office searched three premises in Bengaluru linked to the CoinDCX and Delta Exchange India platforms on 4 and 5 November, using its search powers under section 37 of the Foreign Exchange Management Act, 1999 (FEMA). The agency alleges unauthorised cross-border financial transactions in crypto derivatives and tokenised stocks, routed through overseas exchanges with the USDT stablecoin. Both companies say they cooperated and that trading, deposits and withdrawals continue normally. No charge, penalty or order has been announced.

The searches concern Neblio Technologies Private Limited, which operates CoinDCX, and Excelium Technologies Private Limited, which operates Delta Exchange India. Both operators are registered with the Financial Intelligence Unit-India (FIU-IND) as reporting entities, according to their own statements. The ED's press release was posted first on the agency's X account and was added to the press-release section of its website on 9 November 2026.

What the ED Alleges

According to the release, the investigation started on information alleging large-scale FEMA violations. The ED says both platforms offered spot trading, futures and options on crypto tokens, and trading in tokenised stocks of foreign companies, and that they "were openly advertising trading in tokenised stocks of foreign entities despite being not authorised to do so."

For CoinDCX, the ED describes three flows. In spot trading, users deposit Indian rupees (INR), the INR is converted into USDT, and the USDT is sent to foreign platforms such as Binance, KuCoin and Gate.io to fill certain orders. The agency says this goes through accounts held on those platforms in the name of a Costa Rica-based group entity that it calls a paper entity, while the trades are actually placed directly from CoinDCX through application programming interfaces (APIs). In futures and options, the ED says CoinDCX opens a matching 1:1 position for each user order on Binance, KuCoin, Bybit or Gate.io, and settlement happens on those venues when the user closes. For tokenised stocks of companies such as Apple, Google and Tesla, the ED says the product is in fact derivative trading carried out on Hyperliquid, a foreign decentralised platform, funded by converting user money into USDT.

The ED says each of these flows runs into "thousands of crores" of rupees. It also alleges that CoinDCX holds crypto assets in enterprise accounts on foreign exchanges and pays "hundreds of crores" in transaction fees to those exchanges in USDT, in breach of the FEMA framework for cross-border payments.

For Delta Exchange India, the agency says that a large share of its futures, options and tokenised-stock volume was routed through CoinDCX, which in turn executed it on foreign platforms, with volumes of "several thousands of crores". It adds that hundreds of crores were transferred by Delta Exchange India to associate entities abroad, which it is investigating. The ED also says the products of both platforms appear prima facie contrary to the Securities Contracts (Regulation) Act, 1956, the SEBI Act, 1992 and the RBI Act, 1934, and that this is being examined further.

What the Companies Say

In a statement posted on its official X account on 6 November, CoinDCX said ED officials visited its Bengaluru office "as part of a routine enquiry on 4th November", that it fully cooperated, and that as an FIU-IND-registered entity it operates "in strict compliance with all applicable Indian laws, including FEMA (1999)" and meets KYC, AML and reporting obligations. It said trading, deposits and withdrawals "remain fully operational".

In its own statement on X the same day, Delta Exchange acknowledged the ED's statement about the visit on 4 and 5 November and said it is operating normally, with user funds held in Indian banks. It said Excelium Technologies has been registered with FIU-IND since 2023 and that "our business does not involve any cross-border transfer of VDAs in any form or manner", describing itself as an INR-settled exchange for Indian users only. Delta Exchange's statement therefore directly disputes the ED's description of cross-border routing.

Who Is Affected and What Comes Next

The searches are an investigative step, not a finding. The release does not mention any show-cause notice, penalty, asset freeze or restriction on users, and it ends with "Further investigation is under progress." For now, customers of both platforms face no announced change.

The case matters for the wider Indian market because it targets a product model, not only a single firm. Offering crypto futures, options and tokenised foreign stocks to Indian users through hedging or execution on offshore venues involves outbound movement of value that FEMA restricts, and the ED is testing that model against FIU-IND-registered operators. Exchanges and brokers serving Indian users with similar products, and offshore venues that hold accounts for Indian intermediaries, are the most directly exposed.

It is the ED Bengaluru office's second FEMA action involving a crypto platform in two weeks. On 27 October 2026 it searched premises linked to RPFAS Technologies Private Limited, which operates Mudrex and Saber.money, over alleged unauthorised cross-border transfers of money through stablecoins such as USDT and USDC, according to an ED press release dated 29 October. In that release the ED likewise said the platform advertised cross-border money transfer using crypto without RBI authorisation. Taken together, the two cases show the agency using foreign-exchange law, rather than a dedicated crypto licensing regime, to police how Indian virtual digital asset platforms move value abroad.