India’s Enforcement Directorate (ED) carried out searches at three Bengaluru offices linked to crypto exchanges CoinDCX and Delta Exchange on November 4–5, alleging large-scale, unauthorized cross-border trades routed through crypto derivatives and tokenized-asset products. What the ED says - The ED, invoking the Foreign Exchange Management Act (FEMA), opened the probe after alleging that Neblio Technologies (operator of CoinDCX) and Excelium Technologies (operator of Delta Exchange) enabled hundreds of millions of dollars in cross-border transactions without proper authorization. - Authorities allege CoinDCX converted users’ rupee deposits into stablecoins such as USDT and executed matching positions on overseas exchanges — including Binance, KuCoin, Bybit and Gate.io — bypassing India’s framework for outward remittances. These trades were allegedly routed via accounts tied to a Costa Rica-based group entity described by the ED as a shell, and were executed through APIs. - Tokenized share listings (companies named by the ED include Apple, Google and Tesla) were reportedly not direct share trades but derivative positions opened on the decentralized exchange Hyperliquid, the agency said. - The ED further alleges CoinDCX holds crypto assets in enterprise accounts on foreign exchanges and has paid tens of millions of dollars in USDT in fees — conduct the agency says breaches FEMA. - The probe also targets Delta Exchange: the ED alleges a large portion of Delta’s derivatives flow was executed via CoinDCX, and that Delta transferred tens of millions of dollars to overseas group entities. The agency said some fintech products marketed by the firms may also violate India’s securities and central-banking laws. - The ED’s statement about the searches was dated November 6 and was shared on social media. How the exchanges responded - CoinDCX said ED officials visited its Bengaluru office “as part of a routine enquiry” on November 4. The exchange said it fully cooperated, insists it operates in compliance with Indian laws (including FEMA), and noted it is registered with India’s Financial Intelligence Unit (FIU-IND). CoinDCX also said platform trading, deposits and withdrawals remain fully operational. - Delta Exchange likewise said it cooperated fully and denied any cross-border transfer of virtual digital assets (VDAs). The firm said it runs a rupee-settled exchange for Indian users only, has been registered with FIU-IND since 2023, and that its services are functioning normally. Why it matters - The ED’s allegations underscore tightening scrutiny of crypto cross-border flows, derivatives and tokenized asset offerings in India — areas regulators have flagged for potential violations of FX, securities and banking rules. - The action adds pressure on CoinDCX, which has faced a difficult stretch: the firm confirmed a roughly $16 million loss from retired wallets last month (after earlier labeling an alleged breach a “false alarm”), following a roughly $44 million exploit in July 2025. - Coinbase — an investor in CoinDCX since 2020 — recently won regulatory clearance in India to increase its minority stake in the exchange’s parent. The ED said its investigation is ongoing. Both exchanges maintain they are cooperating and that customer-facing operations continue to run. We’ll update as more details and official filings become available. Read more AI-generated news on: https://app.chaingpt.org/news