- ED investigates CoinDCX and Delta Exchange for alleged forex violations via crypto trades
- Searches conducted at Neblio Technologies and Excelium Technologies premises in Bengaluru
- Alleged unauthorised cross-border crypto derivatives and tokenised stock transactions found
The Enforcement Directorate (ED) has launched an investigation into suspected large-scale violations of foreign exchange regulations involving cryptocurrency platforms CoinDCX and Delta Exchange, alleging that both companies routed transactions worth thousands of crores of rupees through overseas crypto exchanges.
In a press release, the agency said its Bengaluru Zonal Office conducted searches at three premises linked to Neblio Technologies Pvt. Ltd., which operates CoinDCX, and Excelium Technologies Pvt. Ltd., the operator of Delta Exchange India, on November 4 and 5.
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The searches were carried out under Section 37 of the Foreign Exchange Management Act (FEMA), 1999, in connection with alleged unauthorised cross-border transactions involving crypto derivatives and real-world asset (RWA) tokens.
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According to the ED, both platforms offered customers spot trading in cryptocurrencies, futures and options contracts, as well as trading in tokenised stocks of foreign companies, without the requisite authorisation. The agency said its preliminary enquiries indicated that these products were being executed through overseas crypto exchanges, including Binance, KuCoin, Gate.io and Bybit, using stablecoins such as USDT.
The ED alleged that CoinDCX converted customers' rupee deposits into USDT and transferred the funds to overseas exchanges to execute spot crypto trades. These transactions were allegedly routed through accounts held in the name of a Costa Rica-based entity, which the agency described as a paper entity.
The investigation further revealed that the actual transactions were being carried out directly by CoinDCX through application programming interfaces (APIs), the ED said. The volume of such cross-border spot transactions was estimated to run into thousands of crores of rupees.
A similar arrangement was allegedly used for futures and options trading, with CoinDCX opening corresponding 1:1 positions on overseas exchanges against customer orders. When customers closed their positions, the corresponding overseas trades were also closed and settled abroad.
The agency also flagged trading in tokenised stocks of foreign companies such as Apple, Google and Tesla. According to the ED, these were derivative positions executed on Hyperliquid, a foreign-based decentralised crypto trading platform, rather than actual purchases of the underlying shares.
The searches also uncovered enterprise trading accounts on overseas platforms holding crypto assets, allegedly in violation of FEMA provisions. The ED further alleged that CoinDCX paid hundreds of crores in transaction fees to foreign exchanges through USDT, bypassing the prescribed foreign exchange framework.
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In the case of Delta Exchange India, the ED alleged that a substantial portion of its futures and options and tokenised stock transactions was routed through CoinDCX, which subsequently executed them on overseas platforms.
The agency also found that hundreds of crores of rupees were transferred by Delta Exchange India to its overseas associate entities. These transfers are now under investigation.
Separately, the ED said the products offered by both platforms were prima facie being examined for possible violations of the Securities Contracts (Regulation) Act, 1956, the SEBI Act, 1992, and the RBI Act, 1934.
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