India's ED Searches CoinDCX and Delta Exchange Over Alleged Forex Violations
India's Enforcement Directorate searched premises in Bengaluru on November 4 and 5, 2026, probing alleged unauthorized cross-border crypto flows and derivatives trading by CoinDCX and Delta Exchange India. Both exchanges say trading, deposits and withdrawals remain operational and that they are cooperating with the inquiry.
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Story Updates
- Updated Nov 12, 2026, 12:09 PM: ED statement adds specific allegations: shell entity, Hyperliquid-routed RWA trades, and tens of millions in offshore USDT fees.
- Updated Nov 12, 2026, 10:28 AM: Both exchanges said on Nov. 6 that trading, deposits and withdrawals remain operational; Delta denied any cross-border transfers.
What the Enforcement Directorate Searched
India's Enforcement Directorate searched three premises in Bengaluru on November 4 and 5, 2026, tied to crypto exchanges CoinDCX and Delta Exchange India. The searches targeted Neblio Technologies, the company behind CoinDCX, and Excelium Technologies, which runs Delta Exchange India. The agency acted under the Foreign Exchange Management Act, 1999 (FEMA), and said in a statement dated November 6 that it was investigating large-scale unauthorized cross-border financial transactions involving crypto derivatives and real-world asset (RWA) tokens.
The Alleged Flow of Funds
According to the ED, CoinDCX converted users' rupee deposits into USDT and opened matching spot or derivatives positions on foreign exchanges, including Binance, KuCoin, Bybit and Gate.io. The agency says these trades ran through accounts held by a Costa Rica-based group entity it describes as a shell, and were executed directly through APIs. It alleges the cross-border transactions in each category ran to hundreds of millions of dollars.
The agency also alleges that CoinDCX holds crypto assets in enterprise accounts on foreign exchanges and paid tens of millions of dollars in USDT fees to those platforms, in breach of FEMA. It further says tokenized shares of companies including Apple, Google and Tesla were in fact derivatives positions opened on the decentralized exchange Hyperliquid. These specifics come from the ED's own statement and have not been independently verified.
On Delta Exchange, the ED says a large share of its derivatives trading was executed through CoinDCX and that the company transferred tens of millions of dollars to overseas group entities, which is under investigation.
Company Responses
The two exchanges have taken different positions. CoinDCX said on November 6 that ED officials visited its Bengaluru office "as part of a routine enquiry" on November 4, that it had fully cooperated, and that it operates "in strict compliance with all applicable Indian laws, including FEMA." It said it meets its KYC, anti-money laundering and reporting obligations as an entity registered with India's Financial Intelligence Unit. Trading, deposits and withdrawals remain operational.
Delta Exchange India has denied making any cross-border transfers of virtual digital assets. In statements dated November 11 and 12, both firms said normal operations continue and user funds remain secure.
A Widening Legal Scope
The investigation also covers potential violations of the Securities Contracts (Regulation) Act 1956, the SEBI Act 1992 and the RBI Act 1934. The first two bring securities and derivatives regulation into the case, and the third brings in central bank oversight. What began as a foreign exchange matter now touches several parts of India's financial rulebook. The ED says its investigation is ongoing.
Why Derivatives and Stablecoins Are Central
The allegations focus on derivatives, where futures and options allow leveraged positions. When those are reportedly routed through offshore venues, a domestic regulator has less visibility into where the risk sits. In the ED's account, USDT served as the bridge that moved rupee value across borders. The inclusion of tokenized RWA products indicates authorities are examining newer product types, not only spot trading.
Why It Matters
For Traders
Users with open CoinDCX or Delta positions should track platform status pages, since enforcement actions can affect withdrawal and derivatives access even when operations are reported as normal.
For Investors
A probe extending into securities, SEBI and RBI laws signals that Indian regulators may tighten oversight of offshore crypto derivatives access over the coming months.
For Builders
Teams integrating exchange APIs or USDT settlement rails with Indian platforms should review compliance exposure as regulators scrutinize cross-border API connections.
This article is for information only and is not financial advice. Read the full disclaimer.
