Bengaluru: Rupees deposited with an Indian crypto platform, converted into a stablecoin, and moved to exchanges abroad. That is the chain the Enforcement Directorate is now examining.
The agency's Bengaluru zone searched three premises on November 4 and 5, it said in a post on November 6. The searches were carried out under Section 37 of the Foreign Exchange Management Act, 1999.
The premises were linked to Neblio Technologies, which operates CoinDCX, and Excelium Technologies, which operates Delta Exchange India.
According to the agency's preliminary findings, both platforms offered spot trading in crypto tokens, futures and options in crypto tokens, and trading in tokenised stocks of foreign companies.
On spot trades, the ED alleged that rupee deposits on CoinDCX were converted into USDT and transferred to overseas platforms including Binance, KuCoin and Gate.io. The transfers were routed through an account held by a Costa Rica-based entity that the agency described as a paper entity, while the trades themselves were executed by CoinDCX through its APIs.
On futures and options, it alleged that CoinDCX opened corresponding positions on overseas exchanges, including Binance, KuCoin, Bybit and Gate.io, and closed them there when customers closed their trades.
Tokenised stock trades in companies such as Apple, Google and Tesla were not trades in the underlying shares at all, the agency said, but derivative positions executed on Hyperliquid, a foreign decentralised trading platform.
The ED said the cross-border transactions ran into thousands of crores of rupees, and that hundreds of crores were paid to overseas platforms in transaction fees through USDT.
On Delta Exchange India, the agency alleged that a large volume of futures and options trades and tokenised stock transactions was routed through CoinDCX, and that hundreds of crores were transferred to overseas associate entities.
The products, it said, appeared prima facie contrary to the Securities Contracts (Regulation) Act, 1956, the SEBI Act, 1992 and the Reserve Bank of India Act, 1934.
Both companies responded. CoinDCX said officials visited its Bengaluru office on November 4 and that it cooperated, that it operates in compliance with Indian law including FEMA, and that it meets its KYC, AML and reporting obligations. Trading, deposits and withdrawals remain operational, it said.
Delta Exchange said its business does not involve any cross-border transfer of virtual digital assets, that it runs an INR-settled exchange for Indian users only, that Excelium Technologies has been registered with FIU-IND since 2023, and that user funds sit in Indian banks.
The investigation is continuing, the ED said.