Why did the ED raid CoinDCX and Delta Exchange? What users should know

Indian traders could use rupees to open positions tied to Bitcoin or Tesla. The Enforcement Directorate wants to know who placed the corresponding trades abroad, how those positions were funded and whether the exchanges followed India’s foreign exchange rules.

India’s Enforcement Directorate has searched three Bengaluru premises linked to CoinDCX and Delta Exchange India over suspected violations of the Foreign Exchange Management Act, following enquiries into how the exchanges handled trades involving offshore venues.

The ED announced the searches on 6 November. Its Bengaluru Zonal Office conducted them on 4 and 5 November, according to Business Today’s account of the agency’s findings. The companies under examination are Neblio Technologies Private Limited, which operates CoinDCX, and Excelium Technologies Private Limited, which operates Delta Exchange India.

CoinDCX said officials visited its Bengaluru office on 4 November for what it described as a routine enquiry. It said it cooperated, complies with FEMA and other applicable Indian laws, and continued to process deposits, trades and withdrawals. Delta said it also cooperated, that its platform was operating normally and that customer funds remained in Indian banks.

The investigation reaches beyond a single product. The agency describes three routes through CoinDCX: spot orders it says were executed abroad, crypto derivatives it says were matched with overseas positions and foreign stock products it links to Hyperliquid. It is also examining how the exchanges paid overseas companies and where CoinDCX held crypto.

Why the ED searched the exchanges

The ED says its enquiries began with information about possible unauthorised cross-border transactions involving crypto derivatives and tokens tied to real-world assets. In its account of the searches as reported by Exchange4media, the agency says it examined products advertised to Indian users and traced activity to venues abroad, including Binance, KuCoin, Gate.io and Bybit.

The starting point was a local product that could be funded in rupees. The agency is asking what happened after the rupees were deposited. That takes the investigation into the identity of the offshore account holder, the source of the assets used to fund trades and the arrangements under which one company executed a transaction for another.

The agency alleges that the platforms offered exposure to foreign stocks without authorisation. It also raised preliminary questions under the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992, and the Reserve Bank of India Act, 1934. Mint’s account distinguishes those product questions from the suspected foreign exchange contraventions behind the searches.

The foreign exchange inquiry has several parts. A customer might deposit rupees with an Indian company, the company might acquire a stablecoin, and an account on a foreign venue might use that stablecoin to execute a trade. Those steps can involve different owners, counterparties and obligations. The records tying them together matter more to the investigation than the currency displayed on the customer’s balance.

The search also sits apart from CoinDCX’s previous security incidents. Crypto.news has covered the reopening of INR withdrawals following its $44 million breach. In the current case, the agency’s reported account concerns how the businesses arranged trading and overseas payments. CoinDCX says its customer services continued during the inquiry.

Where CoinDCX’s spot orders allegedly went

The ED describes a spot route that begins with a CoinDCX customer depositing rupees and placing an order. According to the agency’s reported account, the funds were converted to USDT and sent to foreign exchanges, where the order was executed. The venues it named in connection with spot trading included Binance, KuCoin and Gate.io.

An order on a domestic app and its execution are separate events. The app can accept the instruction and display the result, while another venue supplies the liquidity against which the order is filled. The key allegation here concerns the payment path used to reach that venue and whether it followed the required cross-border framework.

The ED says the overseas account was in the name of a Costa Rica-based entity that it characterised as a paper entity. It alleges CoinDCX used its own application programming interfaces to carry out the trades. An API can allow software to send an instruction, retrieve a fill or query a balance. The agency’s account puts that connection alongside the identity of the account on which the instruction allegedly arrived.

That creates three records an investigator can compare. The customer ledger can show the rupee debit and the crypto credited. An account record on the overseas venue can show who placed the order and which balance paid for it. A transfer record can identify when USDT moved between accounts or wallets. A shared timestamp or matching amount may help connect those records, but each shows a different part of the transaction.

The source of the stablecoins matters too. An exchange could maintain its own inventory and use it to obtain liquidity, or it could finance a purchase with funds attributable to a customer order. Which arrangement applied here is a question about ownership and accounting. The ED’s reported allegation is that CoinDCX routed customer funds overseas through the conversion and execution process.

A customer’s confirmation screen can establish the amount and price the platform credited without showing every account in the execution chain. The exchange’s own records would be needed to establish whether an offshore fill was allocated to a particular customer, combined with other orders or treated as a transaction on the company’s account.

One question for CoinDCX is whether the Costa Rica-based entity supplied services of its own or simply held an account used by another group company. An account-opening document would identify the account holder. Instructions, funding records and agreements could help establish who controlled it. The published reports do not give the entity’s name or publish those records.

How the agency says crypto futures were matched abroad

In crypto futures and options, the ED describes a different arrangement. The Indian customer would open a position using rupees. CoinDCX would allegedly open a corresponding one-to-one position on an overseas platform through an account held by a Costa Rica-based group entity.

The agency says those corresponding positions were opened through CoinDCX’s APIs on platforms including Binance, KuCoin, Bybit and Gate.io. When a customer closed a position on CoinDCX, the agency alleges that the overseas position was also closed and settled on the foreign platform.

That is a different sequence from buying crypto on a spot order. A derivative can give a trader exposure to a price movement without delivering the underlying asset to their wallet. An exchange or intermediary can also enter a second contract to manage the financial exposure created by the first.

The two contracts can have the same size and still involve different parties. A customer might have a rupee-settled claim against the Indian service, while an offshore account posts collateral and receives or pays settlement under another contract. A one-to-one match would make the positions related. The account records and funding trail would establish who owned the collateral and who had the obligation to pay each side.

For illustration, a leveraged contract with ₹100,000 in exposure could be supported by ₹20,000 of margin at five times leverage, before fees or other requirements. Opening and closing it can contribute more to turnover than the original margin. The example is arithmetic, not a description of CoinDCX’s leverage terms or the transactions the ED examined.

It explains why a report that cites thousands of crores in trading volume cannot automatically describe that amount as fresh money leaving India. A useful reconciliation would identify the notional amount of the trades, collateral transferred, cash or stablecoin settlement and any funds returned. Those quantities may appear in different records and at different times.

The sequence would also matter for losses. If a local position closed at one price and a corresponding offshore contract closed at another, the difference would have to be borne somewhere. The customer terms and the exchange’s accounts could establish whether the Indian balance followed the domestic contract, the offshore fill or a price methodology set by the operator.

The ED’s allegation is specific about the matching of positions and overseas settlement. CoinDCX’s public response, as reported, states its position on compliance and operations. It leaves the account structure, source of collateral and matching process as questions for the exchange to address in detail.

The foreign stock products behind the Hyperliquid allegation

CoinDCX’s own Global Futures help page explains what customers were offered. It describes perpetual futures tied to global stocks and indices that users could trade using rupees. It explicitly says the customer would have exposure without owning the actual stock.

The exchange’s guide to US stock futures names Tesla, Apple, Meta and Alphabet among the markets covered. It describes a trading experience inside the CoinDCX account. A customer choosing Tesla was therefore selecting exposure to its price through a futures product, according to CoinDCX’s description.

The ED’s reported account addresses what allegedly happened behind that product. It says CoinDCX converted funds into USDT and used the stablecoin to open a corresponding position on Hyperliquid. When the customer closed their position, the ED alleges the matching position was closed and settled there.

The distinction between a stock, a stock token and a derivative matters. A share can confer an ownership interest in a company. A product described as tokenised stock could have rights that depend on its structure. A price-linked futures contract can pay out based on price movements without transferring a share. CoinDCX’s description helps identify the customer-facing product, while the agency’s account raises a separate question about the offshore trade.

A Tesla reference price does not identify who owes the customer money when the position is closed. That requires the customer agreement and the terms for settlement, pricing and liquidation. The alleged Hyperliquid leg would have its own funding and settlement records. Investigators would need to establish whether those records show an exchange operating a hedge, execution on a customer’s behalf or another arrangement.

The distinction also affects what kind of evidence an overseas position would provide. A record of a Hyperliquid trade could establish the market, account and transaction visible on that venue. Linking that trade to an individual rupee-funded CoinDCX position would require an allocation record or another reliable connection between the two. The ED’s reported account alleges such matching but does not publish transaction-level examples.

From the customer’s perspective, the rupee settlement experience can be entirely real even if another company uses dollar-linked assets to manage the position. That possibility is what makes the product relevant to the foreign exchange inquiry. It separates the customer’s terms from the funding and execution arrangements the agency is investigating.

Why Delta Exchange is part of the same case

The ED alleges that a substantial volume of Delta Exchange India’s derivatives activity went through CoinDCX. The agency’s account covers crypto futures and options as well as products tied to foreign stocks. CoinDCX, it says, arranged corresponding activity on foreign venues. The allegations bring the two Indian companies into the same investigation even where the customer started with an account at only one of them.

Delta said the authorities visited its premises on 4 and 5 November. It said it cooperated, that trading, deposits and withdrawals were functioning and that customer funds remained in Indian banks. In a separately reported response, it said its business did not involve cross-border transfers of virtual digital assets and described its exchange as an INR-settled service for Indian users.

Those statements address the operation of Delta’s Indian business and the location of customer funds. The agency’s account raises a separate question about what CoinDCX allegedly did when handling positions associated with Delta. Establishing the relationship would require agreements between the companies and records that show who transmitted orders, who placed corresponding trades and who provided collateral.

Take an illustrative trade placed by a Delta customer. The customer ledger would show the INR margin and the result credited or debited to the account. An order or service agreement could identify whether another business received instructions related to that position. An offshore account record could show whether a trade occurred abroad and identify the named account holder. The three layers cannot be reconciled from a single deposit record.

The ED is separately examining transfers worth hundreds of crores from Delta Exchange India to foreign associates. The questions there concern what was transferred, to whom, under what arrangement and how it was accounted for. A payment to an affiliate and a derivatives trade routed through CoinDCX may be part of the same inquiry without representing the same transaction.

Delta’s response should therefore be read against both allegations. Its denial of cross-border transfers of virtual digital assets is direct on that point. Its statement that user funds remained in Indian banks tells readers where it says those balances were kept. The reported responses do not provide the underlying agreements or classify each payment the ED says it is examining.

What the ED’s figures measure

The ED describes volumes running into thousands of crores across several types of trading. It separately alleges that CoinDCX paid hundreds of crores in fees to offshore venues, and that Delta sent hundreds of crores to overseas associates. Mint’s report on the figures identifies those categories but gives no reconciled total.

A trading volume records the value of activity over a period. The same collateral can support repeated positions, and opening and closing contracts can generate multiple entries. A transfer figure concerns money or assets moving between parties. A fee is a charge for a service. The size of one category cannot be inferred from another without knowing how the agency compiled its figures.

There is a further possibility of overlap in a routed trade. An order recorded at Delta, an instruction sent through CoinDCX and a corresponding offshore trade can each appear in a different company’s records. Adding all three entries could count the same exposure more than once. The reported figures do not specify how the agency treated linked transactions.

CoinDCX’s alleged enterprise accounts raise a question about holdings as well as flows. A balance held overseas at a given time is a stock of assets. It could support trades or fee payments over an extended period. A snapshot of the account and a history of movements would be needed to distinguish assets that remained there from assets used and replaced.

The alleged fee payments add another issue. A company may record a fee as a business expense and still have to establish how it paid the overseas recipient. The ED alleges that CoinDCX routed the payments through stablecoins including USDT. An invoice and an expense ledger can identify the purpose and accounting treatment, while a payment record can establish which entity made the transfer and in what asset.

The amounts should also be kept separate from estimates of customer losses. The ED’s reported figures concern trading activity, alleged overseas payments and related transfers. CoinDCX and Delta say their services remained operational. Those statements address service status, while the investigation concerns whether the underlying arrangements complied with the rules.

Why FIU registration and FEMA come up in the same story

CoinDCX points to its registration with India’s Financial Intelligence Unit and says it complies with customer verification, anti-money-laundering and reporting requirements. India has continued to tighten those obligations, including through new FIU customer verification rules for crypto platforms. That history helps explain why the exchange cites its registration in response to a visit from investigators.

Registration concerns obligations such as identifying users, keeping records and reporting certain activity. An investigation into cross-border transactions asks whether the parties involved complied with rules governing the movement of money and assets abroad. A customer could have passed every identification check before placing an order and the authorities could still ask how the firm funded or settled the transaction.

India has also used its anti-money-laundering framework to pursue offshore platforms serving Indian users. Binance’s earlier effort to return to India as an FIU-compliant platform illustrates the separate question of a venue’s status when serving the Indian market. Neither that history nor the names of the offshore venues resolve how CoinDCX or Delta arranged any individual trade.

The text of Section 3 of FEMA addresses dealings in foreign exchange and foreign securities, certain payments to people outside India, and financial transactions in India associated with rights to acquire assets abroad. Its opening language provides for statutory exceptions, rules and permissions. Applying it to this case would require identifying the relevant transaction, the parties and the legal provision the agency relies on.

The ED’s use of the term offshore therefore does more than identify the location of an exchange’s servers or a customer-facing website. In the agency’s reported account, it describes where accounts were held and where corresponding trades were executed or settled. Those locations matter together with who controlled the accounts, who held the balances and whether an Indian entity made a payment to an overseas counterparty.

USDT’s dollar peg helps explain its operational role. A platform can use a dollar-linked balance on a crypto venue without a customer having a US dollar account in the app. The legal treatment of a specific transfer still depends on the facts and applicable rules. The reported investigation centres on how the stablecoin was used, rather than establishing a general ruling on every use of USDT by an Indian business.

The ED’s references to securities and central banking laws also need to stay distinct from the foreign exchange issue. One set of questions concerns whether the businesses were authorised to offer or arrange a product with particular characteristics. Another concerns the route a payment or settlement took. An eventual notice or order would help clarify how the agency applies each law to the conduct it alleges.

An investigator assessing the spot route would have to determine whether the conversion from INR to USDT happened for each individual order or whether the platform used pooled balances to fund many trades. A single transfer could serve several orders, or several transfers could support the same trading account. That is why the denomination of the customer balance and the identity of the overseas account holder are both relevant, even if they appear in entirely different records.

The same distinction applies to fees. An overseas venue can charge for an executed trade without receiving a separate payment from the individual customer. The agency’s reported account attributes payments to CoinDCX and describes them as business expenses paid through stablecoins. A determination about the payment route would turn on the entity billed, the entity that transferred the asset and the records showing the purpose of the payment.

One way to understand the agency’s remit is to start with the local and offshore legs of the same transaction. An INR deposit can be recorded in India while a separate order, margin balance or fee is recorded abroad. If a regulator wants to establish the link between them, it needs evidence of the instructions and obligations that connected the two. An offshore venue’s name on its own does little to establish which Indian customer, company or affiliate ultimately bore the cost.

The public account puts those questions into one investigation because the same businesses and trading relationships appear across the products. The answers could still differ by product and by payment. A document that establishes how one derivatives position was funded would say little about a spot order unless the records show that it used the same account and funding arrangement.

What the exchanges’ replies establish

CoinDCX disputes the premise that its operations breach Indian law. Its statement says officials visited on 4 November and that it gave them the information and assistance they sought. The exchange describes the visit as a routine enquiry, while the ED describes searches across premises associated with the two businesses. Both accounts place officials at CoinDCX’s Bengaluru office on 4 November.

CoinDCX’s statement also answers the immediate operational question. It says customers could continue trading, depositing and withdrawing. This is a claim about the state of its platform at the time of its response. Readers assessing individual transactions still need to consider the relevant service and account. Trading availability, rupee withdrawals and crypto withdrawals are separate functions.

Delta’s statement similarly says its trading, deposits and withdrawals continued and that user funds remained in Indian banks. Its separately reported denial concerns cross-border transfers of virtual digital assets. The ED’s claims about routed orders and payments to affiliates would require evidence about the entities that handled each leg. It is possible for a dispute about those arrangements to persist while users continue seeing rupee balances on the app.

CoinDCX has previously been selected by Indian law enforcement for seized crypto custody. That is a different role from operating the products being examined here. The relevance of both companies’ compliance statements lies in which arrangements they say are lawful and what their records can establish about the transactions now under scrutiny.

As of 8 November, the public accounts reviewed describe searches and an ongoing inquiry. They do not announce an arrest, asset freeze, seizure or adjudication in this probe. The next substantive documents would be any public notice or order identifying the specific transactions and provisions at issue, and any more detailed response from the companies on who owned or controlled the offshore accounts.

For the spot route, the evidentiary chain runs from a rupee order to a USDT transfer and an overseas fill. For a derivative, it runs from a customer contract to a corresponding position, the collateral behind it and the settlement that followed. For Delta, it would include the service agreement and the records passed to CoinDCX. Those are the distinct routes the ED says it is investigating after the Bengaluru searches.

What to Watch

• ED filings: Any notice, complaint or order identifying the specific FEMA provisions, time periods and transactions under examination.
• Offshore accounts: Records identifying the Costa Rica-based entity, who controlled its accounts and whether customer assets or company collateral funded the alleged positions.
• CoinDCX’s response: Any product-specific explanation of who executed spot orders, held collateral and settled crypto or stock-linked futures.
• Delta’s routing records: Details on its relationship with CoinDCX and the purpose, recipient and form of the transfers the ED attributes to foreign associates.
• Customer operations: Exchange notices identifying any change in trading, deposits or withdrawals and the services or accounts affected.

FAQs

Disclaimer: This article is for information and educational purposes only and does not constitute financial or investment advice. Figures are based on sources available at the time of writing and may change with new disclosures. Nothing here is a recommendation to buy, sell, or hold any security or asset. Always do your own research. Information is current as of 8 November 2026. Legal questions should be discussed with qualified counsel.