India’s Enforcement Directorate searches CoinDCX and Delta Exchange over alleged forex violations

The searches took place on November 4 and 5, 2026, across three locations in Bengaluru, targeting Neblio Technologies (CoinDCX) and Excelium Technologies (Delta Exchange India). The ED acted under Section 37 of the Foreign Exchange Management Act (FEMA), which governs cross-border money flows.

Alleged Violations

The agency is probing large-scale cross-border activity involving crypto token derivatives and tokenized real-world asset products. According to the ED, Indian rupee deposits were allegedly converted into USDT and sent offshore through two routes: a Costa Rica-based entity characterized as a "paper entity" and direct API connections to international platforms including Binance, KuCoin, Gate.io and Bybit.

The ED reports unauthorized cross-border flows amounting to several thousand crores of rupees. Additionally, a substantial portion of Delta Exchange India's futures and options trading was reportedly executed offshore through CoinDCX, with transaction fees in the hundreds of crores settled in USDT.

Exchanges' Response

Both exchanges deny the ED's allegations. CoinDCX states it complies with Indian law, while Delta Exchange India explicitly denies making any cross-border transfers of virtual digital assets. As of November 11-12, both companies report normal operations continuing with user funds secure, and they say they are fully cooperating with the inquiry.

We comply with Indian law and are cooperating with the authorities.

Expanding Investigation

The probe has now expanded to include potential violations of three additional laws: the Securities Contracts (Regulation) Act 1956, the SEBI Act 1992, and the RBI Act 1934. This expansion indicates the case is moving beyond forex violations to touch India's securities framework and central banking oversight.

The allegations focus on derivatives trading, which allows traders to bet on price movements with leverage. When reportedly routed through offshore venues, these transactions create regulatory challenges as domestic authorities lose visibility into where funds and risks actually reside.