ED Searches CoinDCX & Delta Exchange Over Alleged Illegal Cross-Border Transfers

ED Searches CoinDCX And Delta Exchange Premises

The Enforcement Directorate carried out searches at three locations in Bengaluru on November 4 and 5, linked to Neblio Technologies Pvt. Ltd., the parent of CoinDCX, and Excelium Technologies Pvt. Ltd., which runs Delta Exchange India. The action was taken under the Foreign Exchange Management Act, 1999, in connection with what the agency describes as large-scale unauthorised cross-border financial transactions involving crypto token derivatives and real-world asset tokens. The ED says the transactions under scrutiny run into thousands of crores of rupees.

The agency's core allegation is that both platforms offered spot trading, futures and options, and trading in tokenised shares of foreign companies through cryptocurrencies without authorisation. According to the ED, rupee deposits from users were converted into stablecoins, mainly USDT, and moved to overseas platforms such as Binance, KuCoin, Gate.io and Bybit, allegedly bypassing forex rules on cross-border transfers. For spot trades, the ED claims CoinDCX used an account of a Costa Rica-based entity it characterises as a paper entity, with transactions allegedly executed through CoinDCX APIs. Similar routing allegations were made for its F&O product, while tokenised-stock trading was said to be routed through Hyperliquid, an overseas decentralised platform. The ED also alleged that CoinDCX paid hundreds of crores in fees to foreign platforms in stablecoins. For Delta Exchange India, the ED alleged that a large share of its derivatives and tokenised-stock volumes was routed through CoinDCX, and that it transferred hundreds of crores to overseas associate entities.

Why It Matters For Businesses

The ED says the products prima facie contravene the Securities Contracts (Regulation) Act, 1956, the SEBI Act, 1992 and the Reserve Bank of India Act, 1934. For exchanges, intermediaries and their advisors, the action signals that tokenised foreign stocks, crypto derivati…