India's ED Searches CoinDCX, Delta Over Cross-Border USDT

By Tom Whitfield

India's Enforcement Directorate searched three premises linked to CoinDCX and Delta Exchange in Bengaluru on November 4 and 5, 2026, while investigating alleged cross-border cryptocurrency transactions worth several thousand crore rupees.

The ED said the November operation targeted three premises linked to the companies operating the two exchanges. Its inquiry covers possible violations of India's Foreign Exchange Management Act (FEMA), alongside other securities and financial regulations.

What do the ED's allegations involve?

According to the agency, CoinDCX allegedly converted customers' rupee deposits into USDT and routed funds to four overseas exchanges:

• Binance
• KuCoin
• Gate.io
• Bybit

The agency said those funds supported spot and derivatives trades. The alleged route resembles a payment relay: customer rupees became USDT, moved to overseas venues and then supported trading in two instrument categories.

The ED also alleged that CoinDCX facilitated tokenized stock trading through the decentralized exchange Hyperliquid. That allegation adds tokenized equities and a decentralized venue to the review already covering alleged customer funding and overseas trading.

For Delta Exchange, the ED alleged that the company routed a substantial volume of derivatives and tokenized-stock trades through CoinDCX. Under the agency's account, CoinDCX became a common link between the two platforms, putting the routing relationship within the inquiry.

The agency's description places alleged misconduct across several links rather than on one venue alone. CoinDCX allegedly handled the rupee-to-USDT conversion, overseas transfers and tokenized-stock activity, while Delta allegedly used CoinDCX for a substantial volume of derivatives and tokenized-stock trades. The two exchanges therefore face overlapping questions over their own conduct and the routing arrangements between them.

How large is the inquiry?

The ED is investigating transactions worth several thousand crore rupees. Across the agency's account, the activity spans customer rupee deposits, USDT conversion, transfers to four international exchanges and trading routed through Hyperliquid.

At that scale, the action reaches across the operating chain rather than one isolated transfer. It combines alleged fiat-to-stablecoin conversion with spot, derivatives and tokenized-stock activity, giving regulators multiple transaction types through which to test compliance.

What do the exchanges say?

Both exchanges said their operations remain normal. CoinDCX said it complies with Indian laws, while Delta Exchange denied facilitating cross-border transfers of virtual digital assets.

The responses target different parts of the ED's account. CoinDCX's compliance statement is general; the agency instead names customer rupee deposits, USDT conversion, four overseas venues and spot and derivatives trades. Delta's denial rejects cross-border asset transfers, while the agency alleges Delta routed substantial derivatives and tokenized-stock volume through CoinDCX.

What are the operational consequences?

Both firms' claims that operations remain normal limit the immediate disruption reported so far. The immediate exposure is regulatory: the ED is investigating possible FEMA violations and other securities and financial regulation breaches.

If the agency substantiates its account, the inquiry could affect how CoinDCX and Delta Exchange document customer funding, overseas routing and tokenized-stock transactions. CoinDCX's role also creates a shared-compliance issue because the ED says Delta activity passed through its platform.

The investigation remains open, and the ED has announced no deadline. Its next substantive checkpoint is a formal finding on the FEMA and related allegations, which would determine whether the cross-border routing practices described in the inquiry face tighter controls.