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1. CoinDCX News: Enforcement Directorate Searches Two Exchanges
In the latest CoinDCX news, India's Enforcement Directorate (ED) said it searched three Bengaluru premises linked to CoinDCX and Delta Exchange India on November 4 and 5, 2026, alleging the exchanges moved customer funds abroad without authorization in breach of the Foreign Exchange Management Act. The agency puts the flows at tens of billions of rupees. Both companies say they are operating normally.
The ED, the federal agency responsible for investigating financial crimes and foreign exchange violations in India, disclosed the action in a post on X. It said the searches targeted locations connected to Neblio Technologies, which operates CoinDCX, and Excelium Technologies, which operates Delta Exchange India.
The agency acted under Section 37 of the Foreign Exchange Management Act of 1999, commonly known as FEMA. The statute governs how money enters and leaves India, and Section 37 gives the ED its powers to search and investigate suspected contraventions. The ED also issued a press release setting out its allegations against CoinDCX in detail.
2. Who Are CoinDCX and Delta Exchange India?
CoinDCX is India's largest crypto exchange by trading volume. Even so, its reported activity is modest by global standards: market data cited at the time of the searches placed its 24-hour volume at roughly $700,000, a small fraction of what the world's largest exchanges handle. Delta Exchange India, which focuses on derivatives, operates on a smaller scale still.
Both platforms acknowledged the officials' visits in posts on X during the previous week, before the ED went public with its account. That sequence means customers learned of the searches from the exchanges first, with the agency's far more detailed allegations arriving only later.
The case lands in a country where crypto trading has grown despite a complicated and often restrictive policy environment. Indian exchanges must register with the country's Financial Intelligence Unit and comply with anti-money laundering rules, while cross-border money movement is tightly controlled under FEMA. The ED's allegations go to the heart of that second constraint.
3. What Does the ED Allege?
The ED alleges that both exchanges sent customer money overseas so users could trade derivatives and tokenized shares of foreign companies, even though neither platform held authorization to do so. Under Indian law, residents' ability to send funds abroad and invest in foreign instruments is governed by specific channels and limits, and the agency contends the exchanges bypassed them.
To illustrate the point, the ED's post included a CoinDCX advertisement promoting futures on U.S. stocks, with trading available from as little as 100 rupees, or about $1.05. The agency presented the ad as evidence that the exchange was actively marketing exposure to foreign equities to Indian retail customers.
The ED described three distinct routes through which CoinDCX allegedly moved money out of the country, covering spot crypto trades, futures and options, and tokenized stocks. It said the volume moving through each of the three channels ran to tens of billions of rupees.
Each of these routes, as the agency tells it, shares a common thread. Customer money entered the exchange in rupees inside India, was converted into a dollar-linked digital token, and was then put to work on platforms located outside the country. The ED's position is that this chain amounts to an unauthorized transfer abroad, regardless of the fact that customers interacted only with a domestic app.
4. How the Spot Trading Route Allegedly Worked
For ordinary spot trades, the ED says CoinDCX converted customers' rupees into Tether (USDT), a stablecoin pegged to the U.S. dollar, and then sent those tokens to overseas exchanges including Binance, KuCoin and Gate.io, where the customer orders were actually filled. In the agency's view, this sidestepped the legal framework that governs transfers of value across India's borders.
The ED alleges that these trades were placed through an account registered to a Costa Rica-based entity, which it characterizes as a paper entity, meaning a company that exists in name but has no real operations. According to the agency, the orders were in practice executed directly from CoinDCX's own systems through application programming interfaces, the software connections that let one platform send instructions to another automatically.
The distinction matters for the ED's case. If the foreign account was merely a pass-through and the trading was controlled from India, the agency can argue that the exchange itself was conducting cross-border transactions on behalf of Indian residents, rather than a separate foreign company doing its own business.
5. Futures, Options and Mirrored Positions
The second route involves derivatives. The ED alleges that whenever a CoinDCX customer opened a futures or options position, the exchange placed a matching position of the same size on a foreign platform, naming Binance, KuCoin, Bybit and Gate.io. Those offshore accounts were allegedly held in the name of a Costa Rica-based group entity, again described by the agency as a paper entity.
When the customer closed a trade on CoinDCX, the corresponding offshore position was allegedly closed at the same time, with settlement taking place abroad. The effect, as the ED describes it, was that the Indian exchange functioned as a front end while the real market risk and settlement sat with foreign venues.
This one-for-one mirroring is a familiar way for a smaller platform to offer products without carrying the risk on its own books. The ED's argument is not about the technique itself but about where the money went and whether the exchange was permitted to send it there.
6. Tokenized Apple, Google and Tesla Shares on Hyperliquid
The third route concerns what CoinDCX offered as tokenized stocks. The ED alleges that tokenized exposure to companies such as Apple, Google and Tesla was in fact a derivatives position on Hyperliquid, a decentralized trading platform based outside India.
According to the agency, the exchange converted customer funds into USDT and opened mirrored positions on Hyperliquid. Customers therefore were not holding shares or share-backed tokens but derivative exposure maintained on an offshore protocol, the ED contends.
The allegation highlights a recurring question in the growing market for tokenized equities: what exactly a customer owns. Some products are backed by real shares held in custody, while others are synthetic contracts that only track a stock price. The ED's position is that CoinDCX's offering fell into the second category and that its structure involved unauthorized cross-border flows.
7. Enterprise Accounts and Fees Paid in Stablecoins
Beyond the three trading routes, the ED alleges that CoinDCX maintains enterprise trading accounts on foreign crypto platforms and holds crypto assets in them, which the agency says breaches FEMA.
The ED also alleges that billions of rupees in transaction fees paid to those foreign platforms were recorded as business expenses on CoinDCX's books. It contends that settling those fees in stablecoins itself contravenes the FEMA framework, since it amounts to paying foreign entities outside approved channels.
These points matter because they reach beyond customer trading into the exchange's own corporate operations. Holding assets on foreign platforms and paying overseas counterparties are both activities that Indian companies normally carry out through authorized banking channels, with reporting requirements attached. By framing stablecoin settlements as a way around those channels, the ED is signaling that it views dollar-pegged tokens not as a neutral technical tool but as a potential route for moving value out of the country outside the controls FEMA establishes.
8. The Allegations Against Delta Exchange India
The ED says Delta Exchange India offers the same suite of products: spot trading, futures and options, and tokenized foreign shares. Its searches allegedly found that a large share of Delta's derivatives and tokenized stock business was routed through CoinDCX, which then executed the trades on foreign platforms, again in breach of FEMA.
The agency puts the value of these cross-border transactions at several tens of billions of rupees. It is separately examining billions of rupees that Delta allegedly transferred to associated entities overseas.
More broadly, the ED said the financial products offered by both exchanges appear to violate several other Indian laws beyond FEMA. It named the Securities Contracts (Regulation) Act of 1956, the Securities and Exchange Board of India Act of 1992 and the Reserve Bank of India Act of 1934. Those statutes underpin the regulation of securities trading, the powers of the market regulator SEBI and the central bank's oversight of money and credit. The ED said its investigation is continuing.
9. Is CoinDCX Still Working?
Yes. CoinDCX says trading, deposits and withdrawals remain fully operational. In its post on X, the exchange said ED officials visited its Bengaluru office on November 4 for what it described as a routine inquiry, and that it cooperated fully.
CoinDCX said it complies with Indian law, including FEMA, and meets its know-your-customer, anti-money laundering and reporting obligations.
Delta Exchange India also acknowledged the visits and said it is operating normally, with user funds held in Indian banks. The company denied that its business involves any cross-border transfer of virtual digital assets. It added that it has been registered with India's Financial Intelligence Unit as a reporting entity since 2023.
10. What Happens Next
All of the claims set out so far are the ED's allegations. No charges or rulings have been announced, and both exchanges dispute key elements of the agency's account. The ED has described its work as an ongoing investigation, which means further steps, including additional searches, summons or formal proceedings under FEMA, would follow from its findings.
For Indian crypto users, the immediate practical message from both companies is continuity: accounts, trading and withdrawals are working. The larger question is whether the case leads authorities to draw firmer lines around offshore derivatives and tokenized stock products offered to Indian residents, an area where the ED has now made clear it believes existing laws already apply.