ED Launches Inquiry into $525 Million Cryptocurrency Deals Involving Mudrex and Instadapp

Investigation into Cryptocurrency Transactions

The Enforcement Directorate (ED) of India has initiated investigations into alleged illicit cross-border cryptocurrency transactions exceeding ₹5,000 crore (approximately $525 million) involving the firms Mudrex and Instadapp. The agency conducted thorough searches of several locations in Bengaluru and Madhya Pradesh on October 27, 2026, as part of their inquiry under the Foreign Exchange Management Act, 1999.

Allegations and Findings

According to information released by the ED on October 29, the agency indicated that their investigations stemmed from allegations regarding significant foreign exchange violations linked to RPFAS Technologies Private Limited, which operates Mudrex and Saber.money. The ED suspects that these companies may have engaged in unauthorized financial deals leveraging cryptocurrencies, notably USDT and USDC stablecoins, to facilitate cross-border money transfers without approval from India's Reserve Bank.

The ED outlined how customers of these platforms reportedly deposited funds, which were subsequently utilized to acquire virtual assets prior to being traded on Indian crypto exchanges. Notably, Mudrex has stated its official registration with India's Financial Intelligence Unit and outlined its compliance under the Prevention of Money Laundering Act, though it has not responded directly to the recent allegations.

Concerns Over Marketing Practices

Screenshots shared in the ED's announcement showcased marketing materials from Saber.money promising swift transactions compared to traditional banking methods, claiming that their services could complete transfers in a matter of seconds.

Investigators expressed concerns that the firms promoted instantaneous international transfers despite lacking the requisite authorization, highlighting a potential exploitation of shell companies registered in tax havens like Canada and the British Virgin Islands.

Instadapp's Operations Under Scrutiny

The investigation into Instadapp, which operates as a decentralized finance protocol on the Ethereum network, also raises red flags. The ED claims that even though Instadapp is registered in Delaware, the operational team is situated in India, naming founder Sowmay Jain as a key figure in managing operations locally. These claims include allegations that income routed from overseas entities to India was disguised as payments for software development services.

Furthermore, the ED has noted that significant amounts of money routed to founders' accounts in Dubai were transacted via prepaid cards issued in Singapore. Although the agency emphasized the preliminary nature of their findings, they anticipate that the suspected violations linked to Instadapp could total around $40 million.

Ongoing Regulatory Scrutiny

Previous investigations by the ED have targeted other companies involved in cross-border cryptocurrency transactions, including searches in June of this year that uncovered more than ₹2,500 crore in unauthorized transfers. The ED's ongoing scrutiny of the cryptocurrency sector has seen increased attention from regulatory bodies as they seek to enforce compliance with anti-money laundering laws, particularly concerning foreign exchange activities.