India Searches CoinDCX, Delta Exchange in Cross-Border Crypto Probe

By Elena Vasquez

India's Enforcement Directorate searched three Bengaluru premises linked to CoinDCX and Delta Exchange on Wednesday, Nov. 4, and Thursday, Nov. 5, in a cross-border crypto-trading probe involving thousands of crores of rupees.

The ED's Bengaluru Zonal Office conducted the searches under Section 37 of India's Foreign Exchange Management Act (FEMA), 1999. The phrase thousands of crores translates into billions of rupees, but the available account does not specify an exact aggregate, identify the Costa Rica-based entity, or state that a final finding of wrongdoing has been reached.

What does the ED allege?

The agency alleges CoinDCX converted customers' Indian-rupee deposits into Tether (USDT), then routed the funds through exchange accounts held in the name of a Costa Rica-based entity. It further alleges CoinDCX used its APIs to execute spot trades on Binance, KuCoin and Gate.io.

The ED also alleges CoinDCX opened matching futures and options positions on Binance, Bybit, KuCoin and Gate.io. That allegation extends the inquiry beyond fund conversion and spot execution to derivatives positions across four named trading venues.

Separately, the ED alleges that a large volume of Delta Exchange India's derivatives trading moved through CoinDCX. The activity included futures, options and tokenized-stock transactions. No value, transaction count or explanation of the routing arrangement is supplied, and the account does not say whether Delta Exchange India knew of the conduct the agency is examining.

The key point is an alleged chain spanning deposits, USDT conversion, a foreign entity, APIs and multiple derivatives markets, rather than one isolated transfer.

Which entities face scrutiny?

The ED has also investigated alleged cross-border crypto transfers involving Mudrex and Instadapp. Unlike CoinDCX and Delta Exchange, neither company is linked in the available account to the three premises searched on Nov. 4 and Nov. 5. The transfers, their value and the role of either company remain unspecified.

Binance, Bybit, KuCoin and Gate.io appear as execution venues in the allegations. The account does not say the ED searched those companies, alleged that they breached FEMA, or reported a response from them. Their appearance does not by itself place them under the same enforcement scrutiny.

Mudrex and Instadapp are therefore named entities in the broader inquiry, while the four trading venues are alleged execution endpoints.

What operational issues are under review?

At the center of the ED's case is the movement from rupee customer deposits to USDT, through accounts in a Costa Rica-based entity's name, into API-executed trades. Each stage links a customer-facing platform to a foreign intermediary and an external venue, making the flow of funds and orders the central operational question.

For CoinDCX, the allegations place its APIs between deposit conversion and trade execution on multiple venues. For Delta Exchange India, the routing allegation raises a separate control question over whether derivatives activity attributed to one platform moved through another platform's infrastructure. The available account does not explain the legal or commercial relationship, so it cannot establish control, benefit or shared responsibility.

Mudrex and Instadapp require narrower treatment. The ED identifies cross-border transfers involving them but supplies no transaction amount, route, date or alleged misconduct. No separate search or penalty against either company is described.

The practical issue is traceability: the investigation focuses on how funds moved and where orders were executed.

How far can the investigation go?

Section 37 supplies the stated legal basis for the searches, but the available account does not set out the documentary evidence, witness statements or agency findings. It also provides no next procedural step, timetable or indication of whether the companies have responded.

That leaves several material questions unanswered, including the precise rupee value, the identity and role of the Costa Rica-based entity, and the structure of the arrangements connecting CoinDCX and Delta Exchange India. It would be premature to infer a final liability determination or required operational remedy from search activity alone.

Because the ED calls the investigation ongoing and gives no deadline, the enforcement window remains open; conclusions about liability, scale or required operational changes would be premature.