- Indian ED searched premises linked to Mudrex, Instadapp over alleged unauthorised crypto transfers.
- The probe targets FEMA violations, involving shell entities and OTC trades on Binance and Bybit.
- Indian traders and investors using USDT or USDC for cross-border transactions must follow FEMA laws.
India’s Enforcement Directorate (ED) has carried out searches in Bengaluru and Madhya Pradesh as part of its investigations into alleged cryptocurrency-based cross-border transfers bypassing the legitimate Reserve Bank of India (RBI) remittance channels.
The probes into Mudrex/Saber.money and Instadapp/Fluid relate to suspected violations of the Foreign Exchange Management Act (FEMA), 1999, with alleged transactions exceeding ₹4,600 crore in one investigation and about $40 million in the other.
ED Searches Mudrex/Saber.money and Instadapp Over Alleged FEMA Violations
On October 27, 2026, the Indian ED searched four premises, three in Bengaluru and one in Madhya Pradesh, under Section 37 of FEMA, 1999. The main targeted entity is Bengaluru-based RPFAS Technologies Private Limited, which runs the platforms Mudrex and Saber.money.
The firm allegedly offered on-ramp and off-ramp services not permitted by the RBI and claimed to provide instant cross-border remittances using Virtual Digital Assets (VDAs). Users allegedly deposited Indian fiat currency into company accounts, which was then converted into USDT and USDC.
Meanwhile, investigators also uncovered a network of overseas shell companies incorporated in Canada, Lithuania, and the United States, controlled from India. These companies run OTC businesses and hold large amounts of funds on foreign platforms like Binance and Bybit. Preliminary findings indicate that balances held by unauthorized cryptos on foreign platforms and cross-border transfers totaled over ₹4,600 crore.
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A parallel investigation focused on Instadapp, an Ethereum-based DeFi protocol now primarily operating as Fluid. Launched in 2018, it enables lending, borrowing, and token swapping. Open-source data shows over $1 billion in managed assets. Its overseas entities are located in Delaware, the British Virgin Islands, Singapore, and Dubai, with key founders and development operations in India.
Furthermore, the ED said stablecoin revenues and investor funds were converted through Singapore companies, such as Independent Reserve and QCP Capital, owned by India-based individuals. Proceeds reportedly went to India as software and consultancy fees, to prepaid cards, and the rest to founders’ accounts in Dubai. The suspected FEMA violations total approximately $40 million.
What Indian Users Should Know About Using Stablecoins for Cross-Border Payments Under FEMA
FEMA, 1999, mandates cross-border transactions involving foreign exchange to follow authorized channels and relevant regulations. Stablecoins like USDT and USDC are virtual digital assets and not legal tender in India. Making international transfers outside authorized remittance channels could attract regulatory scrutiny.
In addition, the Liberalised Remittance Scheme allows eligible persons to remit up to $250,000 per year for eligible purposes but with restrictions. Before making cross-border payments via crypto platforms, users should consult authorised dealer banks.
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