Enforcement Directorate Investigates Crypto Exchanges CoinDCX and Delta Exchange for Alleged Illegal Transactions

Enforcement Directorate Investigates Cryptocurrency Exchanges

India's primary financial crime enforcement agency, the Enforcement Directorate (ED), has conducted searches at three locations in Bengaluru associated with cryptocurrency exchanges CoinDCX and Delta Exchange. This action is part of an investigation into suspected unauthorized cross-border transactions involving significant sums—potentially hundreds of millions of dollars—linked to crypto derivatives and tokenized assets.

Details of the Investigation

The searches, executed over the weekend of November 4 and 5, arise under the Foreign Exchange Management Act (FEMA). A statement outlining these developments was released on November 6 and subsequently shared on social media by the agency.

The investigation focuses on Neblio Technologies, the parent company of CoinDCX, and Excelium Technologies, which operates Delta Exchange. The ED claims that both exchanges have been involved in offering futures and options on cryptocurrencies while promoting trading in foreign tokenized shares without the necessary authorization.

Allegations Against CoinDCX

According to the Enforcement Directorate, CoinDCX has been facilitating trades for its users using stablecoins like USDT to engage with international crypto platforms such as Binance, KuCoin, Bybit, and Gate.io, circumventing Indian regulations about international fund transfers. Specifically, when customers deposited Indian rupees to place trades, CoinDCX allegedly converted those funds into USDT to execute matching trades on overseas exchanges.

These operations reportedly involved accounts connected to Costa Rica, characterized by the agency as shell entities, and were executed via application programming interfaces (APIs) from CoinDCX’s platform.

Concerns Over Legality

The agency further notes that trades involving tokenized shares of major corporations, including Apple, Google, and Tesla, were merely derivatives on the decentralized exchange Hyperliquid. This prompted serious concerns about the legality of the cross-border transactions throughout these dealings, with the ED asserting that the amounts involved stretched into the hundreds of millions of dollars.

Additionally, CoinDCX is believed to maintain crypto holdings on international exchanges and has allegedly incurred substantial fees—tens of millions of dollars—all paid in USDT, again indicating potential violations of FEMA regulations.

Delta Exchange's Role

The investigation also highlights that a significant portion of Delta Exchange’s trading activity in derivatives was conducted through CoinDCX, with Delta Exchange reportedly transferring tens of millions of dollars to its related overseas entities. The agency links this to potential violations of both securities and central banking laws in India, with the inquiry ongoing.

Responses from CoinDCX and Delta Exchange

In response to the ED’s actions, CoinDCX tweeted on November 6 that the agency’s officials visited their site as part of a standard inquiry, asserting that they fully cooperated with the investigation. The firm emphasized compliance with all Indian laws, including FEMA and financial regulations outlined by the Financial Intelligence Unit, and confirmed that trading activities remained normal on its platform.

Delta Exchange issued a parallel statement asserting its full cooperation with investigators and denying involvement in cross-border cryptocurrency transfers. The exchange claims it operates solely as a rupee-settled platform for Indian clients and has been registered with the Financial Intelligence Unit since 2023, maintaining normal trading, depositing, and withdrawal operations.

Challenges for CoinDCX

This investigation comes at a challenging time for CoinDCX, which recently reported a substantial loss of $16 million related to deactivated wallets, just days after the firm’s CEO downplayed fears of a security breach that had initially been reported as a false alarm. This followed another significant $44 million security exploit in July 2025. Compounding these difficulties, Coinbase, a company that has held investment stakes in CoinDCX since 2020, recently received regulatory approval to increase its minority share in CoinDCX’s parent company.