The Enforcement Directorate (ED), Bengaluru Zonal Office, searched three premises linked to Neblio Technologies Private Limited (CoinDCX) and Excelium Technologies Private Limited (Delta Exchange) on 4 and 5 November 2026 under Section 37 of the Foreign Exchange Management Act (FEMA), 1999. In a 6 November 2026 statement on its official X handle @dir_ed, the agency said the case involves alleged large-scale unauthorised cross-border transactions in crypto token derivatives and Real World Asset (RWA) tokens.
According to the ED, both platforms allegedly offered spot trading, futures and options (F&O) on crypto tokens, and trading in tokenised foreign stocks despite not being authorised to do so. Intelligence cited by the agency pointed to USDT routing through overseas exchanges including Binance, KuCoin, Gate.io and Bybit. The probe lands amid tighter Indian VDA scrutiny, including recent RBI and FIU attention on crypto cards on Elets Banking and Finance.
What the ED alleges against CoinDCX
The ED alleges that CoinDCX users deposited rupees for spot orders, funds were converted into USDT and moved to foreign exchanges via an account in the name of a Costa Rica-based entity—described as a “paper entity”—while trades were allegedly driven through CoinDCX APIs. Similar 1:1 mirroring of user F&O positions on Binance, KuCoin, Bybit and Gate.io is alleged, with settlement said to occur overseas.
For tokenised foreign stocks, the ED alleges corresponding derivative positions were opened on Hyperliquid, a foreign decentralised platform, after USDT conversion—not trades in the underlying equities. Volumes across spot, F&O and tokenised-stock flows allegedly ran into thousands of crores, with hundreds of crores in USDT fees said to breach the FEMA framework. CoinDCX was earlier covered here for a USDT loss tied to a deprecated wallet phishing alert.
Delta Exchange India and company responses
On Delta Exchange India, the ED said a large volume of derivatives and tokenised-stock activity was allegedly routed through CoinDCX onto foreign platforms, and that Delta transferred hundreds of crores to overseas associates—transfers still under investigation. A CoinDCX spokesperson told Moneycontrol the Bengaluru visit was a routine enquiry, the firm fully cooperated, and as an FIU-IND-registered entity it complies with FEMA. Delta Exchange said it cooperated fully and denied any cross-border transfer of virtual digital assets.
Why the FEMA crypto probe matters for India fintech
The ED said the products appear, prima facie, contrary to norms under the Securities Contracts (Regulation) Act, 1956, the SEBI Act, 1992 and the Reserve Bank of India Act, 1934. Investigation is ongoing. For India’s VDA ecosystem—including the Bharat Web3 Association as a self-regulatory body for VDAs—the case tests how stablecoin-routed overseas derivatives sit across FEMA, securities and banking law, alongside pressures such as CERT-In flags on AI-powered threats to India’s crypto sector and RBI–FIU-IND anti-money-laundering coordination.
Primary sourcing is the ED’s 6 November 2026 @dir_ed statement, with company responses as reported by Moneycontrol. Allegations above are those of the Enforcement Directorate and remain under investigation; no court finding is implied.
Key takeaways
- ED Bengaluru searched three CoinDCX- and Delta-linked premises on 4–5 November 2026 under FEMA Section 37 over alleged unauthorised cross-border crypto derivative and RWA-token flows.
- The agency alleges INR→USDT routing via a Costa Rica “paper entity”, API-driven execution on Binance, KuCoin, Gate.io, Bybit and Hyperliquid, and volumes into thousands of crores; both firms say they cooperated—CoinDCX cites FEMA compliance, Delta denies cross-border VDA transfers.
- ED says the products appear prima facie at odds with SCRA, SEBI Act and RBI Act norms; investigation continues.
Frequently asked questions
Under which law did the ED search CoinDCX and Delta Exchange?
The Enforcement Directorate said the 4–5 November 2026 Bengaluru searches were conducted under Section 37 of FEMA, 1999.
What products does the ED allege were involved?
Per the ED, alleged products include crypto spot trading, F&O on crypto tokens, and tokenised foreign stocks / RWA tokens, with overseas routing said to use USDT.
Have CoinDCX and Delta Exchange responded?
CoinDCX called the visit a routine enquiry, said it cooperated and complies with FEMA as an FIU-IND-registered entity. Delta Exchange said it cooperated and denies any cross-border VDA transfers.
Featured image: Editorial composite showing the Enforcement Directorate seal with FEMA paperwork and crypto trading imagery. Photo: Moneycontrol
