India's Enforcement Directorate searches CoinDCX and Delta Exchange offices

What happened

India's Enforcement Directorate searched three premises in Bengaluru on November 4 and 5 tied to two crypto exchange operators, according to Decrypt and CryptoPotato. The action targets Neblio Technologies, which runs CoinDCX, and Excelium Technologies, which operates Delta Exchange India. The agency announced the searches in a statement dated November 6 and shared it on X, the reports said, describing the case as an inquiry under the Foreign Exchange Management Act.

The ED alleged that both platforms offered crypto futures and options and advertised tokenized shares of overseas companies without authorization. In CoinDCX's case, the agency said rupee deposits were converted into USDT and used to place spot or derivatives orders on foreign venues including Binance, KuCoin, Bybit and Gate.io. It alleged the trades ran through an account held by a Costa Rica-based group entity described as a shell company and were executed from CoinDCX through APIs.

The agency further alleged that tokenized exposure to Apple, Google and Tesla was actually derivatives trading on Hyperliquid. It said a large portion of Delta Exchange's derivatives activity was routed through CoinDCX, and that Delta had sent tens of millions of dollars to overseas group companies, a transfer it is examining. The ED added that the products may also conflict with Indian securities and central banking laws and that the investigation continues.

Both firms acknowledged the visits and disputed the allegations. CoinDCX called the visit a routine inquiry, said it cooperated fully and maintained that it complies with FEMA, KYC, anti-money laundering and reporting rules as an FIU-registered entity; trading, deposits and withdrawals remained normal. Delta said it cooperated and that its business does not involve cross-border transfers of virtual digital assets, describing a rupee-settled exchange for Indian users that has been FIU-registered since 2023.

Why it matters

The searches put a spotlight on how Indian crypto platforms connect local customers to offshore derivatives and tokenized assets. The ED's case rests on the claim that stablecoin transfers and API-linked accounts were used to move exposure across borders without approvals required under FEMA. If the allegations hold, the case could reshape compliance expectations for exchanges that rely on overseas liquidity venues and tokenized stock products. The action also comes as Indian authorities examine the boundary between crypto derivatives and securities or central-banking rules, making the outcome relevant beyond the two companies.

What the data shows

The reports describe the alleged cross-border flows as running into hundreds of millions of dollars in each area. CryptoPotato put the value of each transaction channel at tens of billions of rupees and said the ED is separately examining billions of rupees that Delta allegedly sent to overseas associates. Decrypt reported that CoinDCX paid tens of millions of dollars in fees to foreign exchanges in USDT and held crypto assets in enterprise accounts there. The searches covered three premises on November 4 and 5; the ED's statement was dated November 6.

Background

CoinDCX has faced other pressures. According to CryptoPotato, it confirmed a $16 million loss from retired wallets in October 2026, days after its CEO had described breach reports as a false alarm. That followed an exploit in July 2025 that cost about $44 million, which the exchange said was covered from reserves and did not affect customer funds in cold wallets. Decrypt reported that Coinbase, an investor in CoinDCX since 2020, received approval from India's competition regulator to raise its minority stake in the exchange's parent. Delta has said it has been registered with the Financial Intelligence Unit since 2023.

What is still unclear

The ED's allegations have not been tested in a final adjudication, and the agency said its investigation is ongoing. It is not yet clear what specific enforcement steps, if any, will follow, or how the agency will classify the tokenized-stock products in relation to securities and central-banking statutes. The scope of Delta's overseas transfers and the status of the Costa Rica-based entity also remain under examination. Both exchanges deny wrongdoing, leaving key factual questions unresolved.

What to watch

Further ED statements, notices or court filings will indicate whether the case moves from searches to formal enforcement. Regulatory attention from the FIU, SEBI or the RBI may also shape how tokenized shares and offshore derivatives are treated. For users, the immediate watch item is whether trading, deposits and withdrawals remain available; both companies said they were operating normally after the visits.

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