ED raids CoinDCX, Delta Exchange over alleged FEMA violations

The Enforcement Directorate (ED) has conducted searches at three premises in Bengaluru linked to cryptocurrency trading platforms CoinDCX and Delta Exchange India over alleged violations of the Foreign Exchange Management Act (FEMA), 1999, relating to unauthorised cross-border financial transactions involving crypto derivatives and real-world asset (RWA) tokens.

The ED said its Bengaluru Zonal Office conducted the searches on November 4 and 5, 2026, as part of an investigation into suspected violations of the foreign exchange framework through transactions involvingderivative trading in crypto tokens and tokenised stocks of foreign companies.

The investigation is based on information received and material available against Neblio Technologies Private Limited, which operates the CoinDCX platform, and Excelium Technologies Private Limited, which operates Delta Exchange.

According to the ED, the platforms offered products such as futures and options trading in cryptocurrency tokens and trading in tokenised real-world assets. The agency alleged that these platforms were openly advertising trading in tokenised stocks of foreign entities despite not being authorised to offer such products.

Preliminary enquiries and intelligence gathered by the Directorate indicated that the platforms were using stablecoins, particularly USD Tether (USDT), to facilitate derivative trading and tokenised stock transactions on overseas cryptocurrency exchanges.

These included Binance, KuCoin, Gate.io and Bybit, among other foreign-based crypto trading platforms.

The ED said its searches revealed that both CoinDCX and Delta Exchange offered customers products across spot trading, cryptocurrency derivatives, including futures and options, and trading in tokenised stocks. However, the agency alleged that several of these transactions were ultimately being executed through foreign-based cryptocurrency trading platforms.

CoinDCX: ED alleges multi-layered routing of customer funds through overseas exchanges

The ED's investigation into CoinDCX revealed that the platform was offering spot cryptocurrency trading as well as futures and options trading in crypto tokens and tokenised stocks of foreign companies.

The agency alleged that the platform was using a mechanism involving multiple stages to route Indian customer funds to overseas cryptocurrency exchanges, effectively facilitating cross-border transactions through stablecoins.

In the case of spot trading, the ED identified what it described as a 'double-hop' transaction mechanism.

Under this arrangement, a customer first deposits money in Indian rupees (INR) into CoinDCX and places an order for spot trading in a cryptocurrency token. The rupee funds are subsequently converted into the stablecoin USDT.

The stablecoins are then transferred to overseas cryptocurrency exchanges such as Binance, KuCoin and Gate.io, where the customer's trading order is executed.

According to the ED, such transfers of funds to foreign-based exchanges were being undertaken without following the prescribed framework for cross-border money transfers.

The agency further alleged that the transactions were being routed through an account opened in the name of a Costa Rica-based entity on overseas cryptocurrency trading platforms. The entity was allegedly found to be a paper entity.

The ED also stated that the transactions were being undertaken directly from CoinDCX through Application Programming Interfaces (APIs), indicating an operational connection between the Indian platform and the overseas exchanges.

The investigation revealed that the volume of such cross-border spot trading transactions was running into thousands of crores of rupees, the agency said.

Futures and options positions allegedly mirrored on foreign exchanges

The ED's investigation also examined the manner in which CoinDCX facilitated futures and options trading in cryptocurrency tokens.

According to the agency, customers deposit Indian rupees into CoinDCX and place orders to open futures and options positions. The platform then allegedly opens corresponding one-to-one positions on foreign cryptocurrency trading platforms, including Binance, KuCoin, Bybit and Gate.io.

These corresponding positions are reportedly opened through an account in the name of a Costa Rica-based group entity, which the ED alleged was a paper entity.

The agency said the transactions were being undertaken directly through CoinDCX's APIs.

When a customer closes a position on CoinDCX, the corresponding position on the overseas trading platform is also closed, with settlement taking place on the foreign platform.

The ED alleged that the arrangement effectively enabled Indian customers to obtain exposure to cryptocurrency derivatives traded on overseas exchanges through the Indian platform.

The volume of such cross-border futures and options transactions was also found to be running into thousands of crores of rupees, according to the press release.

Tokenised stock trading: ED flags exposure to Apple, Google and Tesla through Hyperliquid

Another area under investigation is CoinDCX's offering of trading in tokenised stocks of foreign companies, including Apple, Google and Tesla.

The ED said its searches revealed that what was being offered to customers as trading in tokenised stocks was, in reality, derivative trading in tokenised stock products on Hyperliquid, a foreign-based decentralised cryptocurrency trading platform.

According to the agency, the transaction mechanism begins with a customer depositing Indian rupees into CoinDCX and placing an order for a global futures stock product.

CoinDCX allegedly opens a corresponding one-to-one position for the customer on Hyperliquid by converting the user's funds into the stablecoin USDT. The stablecoin is then used to open the corresponding position on the overseas platform.

When the customer closes the position on CoinDCX, the corresponding position on Hyperliquid is also closed, with settlement taking place on the foreign platform.

The ED said the volume of cross-border transactions involving tokenised stocks was also running into thousands of crores of rupees.

The agency is examining whether the structure effectively facilitated overseas derivative exposure for Indian customers through arrangements that were not authorised under the applicable regulatory framework.

Enterprise crypto accounts and payments worth hundreds of crores under scrutiny

The investigation also revealed that CoinDCX allegedly maintained enterprise trading accounts on foreign-based cryptocurrency trading platforms, through which crypto assets were held overseas in contravention of FEMA provisions, according to the ED.

The agency further alleged that CoinDCX was paying hundreds of crores of rupees to foreign-based cryptocurrency trading platforms as transaction fees, treating these payments as business expenses.

However, the ED said these fee payments were being routed through stablecoins such as USDT, allegedly in violation of the framework envisaged under FEMA, 1999.

The agency is examining the nature of these overseas holdings, the movement of stablecoins and the manner in which payments to foreign exchanges were structured.

Delta Exchange India: ED alleges large-scale derivatives transactions routed through CoinDCX

The ED's investigation also covered Delta Exchange India, operated by Excelium Technologies Private Limited.

The platform offers customers spot trading, futures and options trading in cryptocurrency tokens, as well as trading in tokenised stocks of foreign companies.

Searches at two premises belonging to the group revealed several alleged irregularities in the manner in which these products were being offered and executed.

According to the ED, a large volume of derivative transactions, including futures and options trading and trading in tokenised stocks, offered by Delta Exchange India was, in fact, being routed through CoinDCX.

The agency alleged that CoinDCX, in turn, was undertaking the corresponding transactions on foreign-based cryptocurrency trading platforms such as Binance, KuCoin, Gate.io and Bybit.

The ED said these transactions were being conducted in contravention of FEMA provisions governing cross-border financial transfers.

The volume of such cross-border transactions was found to be running into several thousands of crores of rupees, the agency alleged.

The searches also revealed that hundreds of crores of rupees were being transferred by Delta Exchange India to its associate entities located in foreign countries. These transfers are currently under investigation, the ED said.

Regulatory compliance of fintech products also under examination

Apart from the alleged FEMA violations, the ED said its investigation had raised questions about the regulatory compliance of the fintech products offered by the two platforms.

According to the agency, the products offered by these entities appeared, prima facie, to be contrary to the norms prescribed under several Indian regulatory legislations.

These include the Securities Contracts (Regulation) Act, 1956, the SEBI Act, 1992, and the Reserve Bank of India Act, 1934, among other applicable laws.

The agency said the matter was being examined further.

The investigation is focused on the alleged use of Indian crypto trading platforms to facilitate exposure to overseas cryptocurrency derivatives and tokenised foreign stocks, the movement of customer funds through stablecoins, the use of foreign corporate entities to operate trading accounts, and the transfer of funds to overseas associates and exchanges.

Further investigation is under progress, the ED said.