India’s Enforcement Directorate (ED) has raided premises linked to CoinDCX and Delta Exchange India for alleged violations of foreign exchange rules involving unauthorized cross-border crypto transactions.
The searches took place on November 4 and 5, when officials visited three premises in Bangalore linked to Neblio Technologies, the company behind CoinDCX, and Excelium Technologies, which operates Delta Exchange India.
ED Reports Alleged FEMA Violations Worth Billions
The investigation is ongoing led under Section 37 of the Foreign Exchange Management Act (FEMA) of 1999, which governs cross-border financial transactions. According to the ED, the two exchanges allegedly moved clients’ funds abroad to facilitate derivatives trading and exposure to tokenized shares of foreign companies without the required authorization.
The agency outlined three primary avenues through which CoinDCX allegedly processed these transactions. For some spot trades, the exchange reportedly converted customers’ rupees into USDT and transferred the stablecoins to foreign platforms, including Binance, KuCoin and Gate.io, to execute the orders. The ED alleged that these transactions circumvented India’s prescribed foreign exchange framework and were routed through an account belonging to a Costa Rica-based entity that it described as a paper company.
The agency claimed that transactions were in fact executed directly through CoinDCX using application programming interfaces (APIs). A similar arrangement reportedly existed for futures and options trading, where clients’ positions on the crypto exchange were mirrored one-for-one on foreign exchanges such as Binance, KuCoin, Bybit and Gate.io.
The ED also questioned CoinDCX’s tokenized stock offerings, which included exposure to companies such as Apple, Google and Tesla. He alleged that these products were in fact derivatives trades executed on Hyperliquide and that client funds were converted into USDT before the corresponding positions were opened overseas. The agency said each of the three transaction channels involved tens of billions of rupees.
He also alleged that CoinDCX maintained corporate accounts on foreign crypto exchanges, held crypto assets through them and paid billions of rupees in transaction fees. The agency said these payments, made via stablecoins such as USDT and recorded as business expenses, violated FEMA requirements.
Delta Exchange India is also part of the investigation. The ED said the platform offered spot trading, futures, options and tokenized shares of foreign companies. However, investigators reportedly discovered that a large portion of its derivatives and tokenized stock trades were routed through CoinDCX, which then executed the orders on foreign platforms. The agency estimates the value of these transactions at tens of billions of rupees and is separately examining billions of rupees that Delta allegedly sent to associated entities abroad.
The ED added that the products of the stock exchanges may also conflict with the provisions of the Securities Contracts (Regulation) Act, the SEBI Act and the RBI Act. Both companies acknowledged the visits but denied the allegations. CoinDCX describe the search as part of a routine investigation and said it had fully cooperated with authorities.
Security issues
CoinDCX faced another security controversy in October 2026, more than a year after losing approximately $44 million in a cyberattack on July 19, 2025. The previous breach targeted an internal liquidity provision account, but the exchange said customer funds in cold wallets were not affected and that it covered the loss using its own reserves.
On October 21, approximately 15.99 million USDT, along with small amounts of TRX, were transferred from Tron addresses linked to CoinDCX to external platforms, including Binance and OKX. The exchange initially denied any breach of its active wallets and blamed a failure involving old deposit addresses compromised in the 2025 attack.
Blockchain investigators, including ZachXBT, have questioned this explanation. CoinDCX later acknowledged the loss in a blog post, saying some customers continued to deposit funds to addresses that were supposed to have been withdrawn.
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