The Enforcement Directorate (ED), Bengaluru, has conducted searches at three premises linked to cryptocurrency platforms CoinDCX and Delta Exchange over alleged unauthorised cross-border financial transactions involving crypto derivatives and Real World Asset (RWA) tokens.
In a post on X on November 6, the agency said the searches were conducted under the Foreign Exchange Management Act (FEMA), 1999. The searches took place on November 4 and 5 at premises linked to Neblio Technologies Pvt. Ltd., which operates CoinDCX, and Excelium Technologies Pvt. Ltd., which operates Delta Exchange India.
According to the ED, both platforms offered spot trading in cryptocurrencies, futures and options in crypto tokens, and trading in tokenised stocks of foreign companies. The agency is examining whether these activities involved unauthorised cross-border transactions.
What has the ED alleged?
The ED’s preliminary investigation indicated that customer funds deposited in Indian rupees on CoinDCX were converted into USDT, a stablecoin, and transferred to overseas cryptocurrency exchanges, including Binance, KuCoin and Gate.io, to execute trades.
The agency alleged that these transactions were routed through an account held in the name of a Costa Rica-based entity, which it described as a paper entity. It said the transactions were also executed through CoinDCX’s application programming interfaces (APIs).
The agency said the volume of cross-border spot trading transactions ran into thousands of crores of rupees.
The ED also alleged that CoinDCX facilitated cryptocurrency futures and options trades by opening corresponding positions on overseas exchanges, including Binance, KuCoin, Bybit and Gate.io. According to the agency, these positions were linked to customer trades on the Indian platform, with settlements taking place on the overseas exchanges.
Delta Exchange transactions under investigation
The ED alleged that a large volume of futures and options trades and tokenised stock transactions offered by Delta Exchange India were routed through CoinDCX, which then executed corresponding transactions on overseas cryptocurrency exchanges.
The agency said these cross-border transactions involved several thousand crores of rupees. It is also investigating alleged transfers of hundreds of crores of rupees by Delta Exchange India to its overseas associate entities.
The ED is examining the regulatory compliance of products offered by both platforms under the Securities Contracts (Regulation) Act, 1956, the SEBI Act, 1992, and the Reserve Bank of India Act, 1934, among other laws.
The agency said further investigation is underway.