- The ED’s Bengaluru office searched three premises linked to these two exchanges.
- The ED puts cross-border trade volumes at several thousands of crores of rupees.
- Both exchanges deny wrongdoing, saying trading and withdrawals proceed normally.
India’s Enforcement Directorate has searched premises linked to two crypto exchanges, CoinDCX and Delta Exchange India, saying it found evidence that trades worth several thousands of crores of rupees were sent to overseas platforms in breach of the country’s foreign exchange law. Both companies reject the suggestion of wrongdoing.
The agency’s Bengaluru office said it searched three premises linked to Neblio Technologies, which runs CoinDCX, and Excelium Technologies, which operates Delta Exchange India. It is investigating under the Foreign Exchange Management Act, 1999, in a case involving crypto token derivatives and tokenised real-world assets.
What the ED Alleges
The ED said the searches showed that a large share of the derivatives trades placed by Delta Exchange India, which offers futures and options and tokenised shares of foreign companies, was actually routed through CoinDCX.
CoinDCX in turn executed those trades on foreign platforms including Binance, KuCoin, Gate.io and Bybit, the agency said, putting the cross-border volume at several thousands of crores of rupees.
Related: CoinDCX Confirms $16M Loss After Failed Wallet Sweeping System Exposed Deposits
It also alleged that CoinDCX keeps crypto assets in enterprise accounts on overseas platforms, which FEMA does not permit, and pays hundreds of crores of rupees in fees to those platforms in stablecoins such as USDT, which it said also breaches the law. Delta Exchange India, it added, transferred hundreds of crores of rupees to associated entities abroad, now under investigation.
The agency said the products on offer also appear, on first reading, to run against the Securities Contracts (Regulation) Act, the SEBI Act and the RBI Act. It said inquiries are continuing.
The Companies’ Response
Delta Exchange said ED officials visited on Nov. 4 and 5 and that it cooperated fully. Its business “does not involve any cross-border transfer of VDAs in any form or manner,” it said, adding that it runs a rupee-settled exchange for Indian users only, has been registered with the Financial Intelligence Unit since 2023, and that trading, deposits and withdrawals continue normally.
CoinDCX described the Nov. 4 visit to its Bengaluru office as a “routine enquiry” and said it provided the information requested. It said it complies with FEMA and all know-your-customer and anti-money-laundering rules, and that its platform is fully operational.
Related: Indian Stocks Defy Asian Sell-Off as Nifty Hits Three-Month High
Conflicting Accounts
The two accounts conflict. Delta says nothing crosses borders, while the ED says its derivatives flow ran through CoinDCX to foreign venues. The agency has not said what action it may take next.
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