India's Enforcement Directorate searched premises linked to crypto exchanges CoinDCX and Delta Exchange India over alleged unauthorized cross-border transactions. The agency alleges the platforms routed customer trades through foreign exchanges. Both exchanges say operations continue as normal.
India's Enforcement Directorate (ED) searched three premises in Bengaluru on Nov. 4 and Nov. 5, linked to the operators of CoinDCX and Delta Exchange. The agency acted under Section 37 of the Foreign Exchange Management Act (FEMA), the 1999 law that governs how money moves in and out of the country.
ED alleges customer trades were routed abroad
The ED alleged that both platforms sent customer money abroad to trade derivatives and tokenized shares of foreign firms, although neither was authorized to do so. According to the agency, CoinDCX converted customers' rupees into the stablecoin USDT on some spot trades and sent it to foreign exchanges including Binance, KuCoin and Gate.io.
In futures and options, the ED said CoinDCX mirrored each customer's position one for one on a foreign platform, through an account in the name of a Costa Rica-based group entity that the agency described as a paper entity. The ED also alleged that the tokenized stock trading in shares of companies such as Apple, Google and Tesla was in fact derivatives trading on Hyperliquid.
The ED put the volume of each of these three flows at tens of billions of rupees. It said Delta Exchange India offers the same set of products, and that a large part of Delta's derivatives and tokenized-share trading was routed through CoinDCX, which then executed the trades on foreign platforms.
Exchanges say operations are normal
CoinDCX said ED officials visited its Bengaluru office on Nov. 4 as part of a routine inquiry and that it cooperated fully. It added that trading, deposits and withdrawals remain fully operational.
Delta Exchange India said it is operating as usual, with user funds remaining in Indian banks. Delta denied any cross-border transfers: "our business does not involve any cross-border transfer of VDAs in any form or manner", using the abbreviation for virtual digital assets.
The ED said further investigation is under way.
Sources: CoinDesk, The Defiant
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