India's Financial Crimes Agency Searches CoinDCX, Delta Exchange Over Offshore Trades

The searches were conducted on November 4 and 5 under India's Foreign Exchange Management Act (FEMA), the agency announced in a statement dated November 6. The Enforcement Directorate alleges CoinDCX converted users' rupees into USDT and executed trades on foreign exchanges including Binance, KuCoin, Bybit and Gate.io through a Costa Rican 'paper entity.'

The investigation targets Neblio Technologies, which operates CoinDCX, and Excelium Technologies, which runs Delta Exchange. Both platforms offered futures and options on crypto tokens and advertised trading in tokenized shares of foreign companies without proper authorization, according to the agency.

Alleged Trade Mechanism

When users deposited rupees and placed spot or derivatives orders, CoinDCX allegedly converted the funds into USDT and opened matching positions on foreign exchanges, bypassing India's framework for sending money abroad. The trades were conducted through accounts held by a Costa Rica-based group entity described as a shell entity, directly from CoinDCX through APIs.

Trades in tokenized shares of companies such as Apple, Google and Tesla were actually derivatives positions opened on decentralized exchange Hyperliquid, the agency claimed. It alleged the cross-border transactions in each of these areas ran to hundreds of millions of dollars.

Exchange Responses

CoinDCX stated in a tweet on November 6 that Enforcement Directorate officials had visited its Bengaluru office 'as part of a routine enquiry' and that it had fully cooperated. The exchange emphasized it operates 'in strict compliance with all applicable Indian laws, including FEMA' and adheres to its KYC, anti-money laundering and reporting obligations as an entity registered with India's Financial Intelligence Unit.

Delta Exchange also tweeted on November 6 that it had cooperated fully with officials, stating its business 'does not involve any cross-border transfer of VDAs in any form or manner' (India's term for crypto assets). It claimed to run a dedicated rupee-settled exchange for Indian users only and has been registered with India's Financial Intelligence Unit since 2023.

Broader Context

The investigation adds to a difficult period for CoinDCX, one of India's largest crypto exchanges. Last month, it confirmed a $16 million loss from retired wallets, days after co-founder and CEO Sumit Gupta called reports of a breach a 'false alarm.' This followed a roughly $44 million exploit in July 2025.

Coinbase, which has invested in CoinDCX since 2020, recently won approval from India's competition regulator to increase its minority stake in the exchange's parent company. The Enforcement Directorate's investigation is ongoing, with potential legal consequences for both exchanges if the allegations are proven.