Foreign exchange violations: ED searches offices of CoinDCX, Delta Exchange

The Enforcement Directorate (ED) conducted search operations at three premises in Bengaluru linked to cryptocurrency exchanges CoinDCX and Delta Exchange over suspected large-scale violations of the Foreign Exchange Management Act.

The action, carried out on November 4 and 5 by the ED’s Bengaluru Zonal Office, targeted Neblio Technologies Private Limited, which operates CoinDCX, and Excelium Technologies Private Limited, the operator of Delta Exchange India. The federal financial watchdog initiated the probe following information pointing to unauthorized cross-border financial transactions running into thousands of crores of rupees.

According to ED officials, both platforms allegedly facilitated spot cryptocurrency trading, futures and options in digital assets, and trading in tokenised stocks of foreign companies such as Apple, Google, and Tesla without requisite regulatory approvals.

Investigating officers claim that customer deposits in Indian rupees were converted into the stablecoin Tether (USDT) and routed to overseas exchanges — including Binance, KuCoin, Gate.io, and Bybit — to execute trades, effectively bypassing the established foreign exchange payment architecture.

The investigation further revealed that CoinDCX maintained enterprise trading accounts on foreign crypto platforms, holding digital assets abroad in contravention of FEMA provisions. The agency also noted that transaction fees worth hundreds of crores of rupees were paid to foreign exchanges in USDT.

In the case of Delta Exchange India, the ED alleged that a substantial portion of its futures, options, and tokenised stock transactions was routed through CoinDCX for execution on overseas platforms like Hyperliquid. Funds transferred by Delta Exchange India to its offshore associate entities are also under scrutiny.

Beyond FEMA violations, the ED stated that products offered by both entities are prima facie under examination for potential non-compliance with the Securities Contracts (Regulation) Act, 1956, the SEBI Act, 1992, and the RBI Act, 1934.

Responding to the development, CoinDCX issued a statement acknowledging that ED officials visited its Bengaluru office as part of a routine inquiry. The exchange confirmed that it fully cooperated with the agency, asserting that all operations — including deposits, trading, and withdrawals — remain fully functional and compliant with FIU-IND regulations and applicable laws.

"Officials from the Enforcement Directorate visited our Bengaluru office as part of a routine enquiry on 4th November. We fully cooperated with the authorities and provided all necessary information and assistance. As an entity registered with FIU-IND, we regularly assist law enforcement agencies with their inquiries. We operate in strict compliance with all applicable Indian laws, including FEMA (1999), and also adhere to all KYC, AML and reporting obligations. Please note that all activities on the CoinDCX platform, including trading, deposits and withdrawals, remain fully operational, and we remain committed to the highest standards of governance," read the statement shared on social media.

In a statement Delta Exchange said, "We acknowledge the Enforcement Directorate’s statement regarding their visit to our premises on 4th & 5th November. Delta Exchange India is operating business as usual with no disruptions, in accordance with applicable law. Trading, deposits and withdrawals are all functioning smoothly, and user funds remain secure in Indian banks. We cooperated fully with the officials and provided the information that they sought. We remain committed to extending our support and cooperation as may be required."