Key facts
- The Enforcement Directorate alleges CoinDCX converted users' rupees into USDT and traded on Binance, KuCoin, Bybit and Gate.io.
- The agency said the trades ran through accounts of a Costa Rica-based group entity it described as a shell entity.
- Tokenized share trades in Apple, Google and Tesla were derivatives positions on Hyperliquid, the agency alleged.
- The agency said Delta Exchange transferred tens of millions of dollars to overseas group entities, which it is investigating.
- CoinDCX said it operates in strict compliance with Indian laws including FEMA and that trading, deposits and withdrawals remain operational.
- Delta Exchange said it runs a rupee-settled exchange for Indian users only and has been registered with the Financial Intelligence Unit since 2023.
India's Enforcement Directorate searched three premises in Bengaluru linked to crypto exchanges CoinDCX and Delta Exchange on November 4 and 5, the agency said in a statement dated November 6 that it shared on X on November 12. The searches were carried out under the Foreign Exchange Management Act, or FEMA, India's law governing cross-border money flows.
The agency said the investigation targets Neblio Technologies, which operates CoinDCX, and Excelium Technologies, which runs Delta Exchange. It alleged both platforms offered futures and options on crypto tokens and advertised trading in tokenized shares of foreign companies without authorization.
The Enforcement Directorate alleged CoinDCX converted users' rupee deposits into the stablecoin USDT and opened matching positions on Binance, KuCoin, Bybit and Gate.io, bypassing India's framework for sending money abroad. It said the trades ran through accounts held in the name of a Costa Rica-based group entity, which it described as a shell entity, and were executed directly from CoinDCX through APIs.
Trades in tokenized shares of Apple, Google and Tesla were in fact derivatives positions opened on the decentralized exchange Hyperliquid, according to the agency. It said the cross-border transactions ran to hundreds of millions of dollars, that CoinDCX holds crypto assets in enterprise accounts on foreign exchanges and has paid tens of millions of dollars in USDT fees to those platforms in breach of FEMA.