India Financial Crimes Agency Searches CoinDCX and Delta Exchange

India's financial crimes investigator has searched three locations in Bengaluru associated with major cryptocurrency platforms CoinDCX and Delta Exchange. The enforcement action follows allegations that the digital asset exchanges carried out massive unauthorized cross-border financial transactions involving crypto derivatives and tokenized assets.

The searches took place on November 4 and 5 under the provisions of India's Foreign Exchange Management Act. The regulatory scrutiny targets Neblio Technologies, the operator of CoinDCX, and Excelium Technologies, which manages Delta Exchange. According to the agency, both platforms offered futures and options on digital tokens and openly facilitated trading in tokenized shares of prominent foreign corporations without the required authorizations.

Investigators alleged that CoinDCX routed user funds into stablecoins like USDT to execute trades on international platforms including Binance, KuCoin, Bybit, and Gate.io, thereby bypassing standard frameworks for sending capital abroad. When clients deposited Indian rupees and initiated spot or derivatives orders, the exchange reportedly converted those amounts and opened matching positions via application programming interfaces through a Costa Rica-based entity described as a shell company. Additionally, trades in tokenized shares of companies such as Apple, Google, and Tesla were identified as derivatives positions executed on decentralized exchange Hyperliquid.

The agency stated that cross-border transactions across these categories reached hundreds of millions of dollars. Furthermore, CoinDCX allegedly maintained enterprise accounts on foreign exchanges and disbursed tens of millions of dollars in fees using USDT in violation of regulatory statutes. Investigators also noted that a significant portion of Delta Exchange derivatives trading was executed via CoinDCX, and that Delta Exchange transferred substantial funds to overseas group entities.

Enforcement Directorate searches CoinDCX and Delta Exchange over alleged unauthorized cross-border crypto transactions.

Both exchanges addressed the inspections publicly. CoinDCX stated that authorities visited its Bengaluru office for a routine inquiry and that it cooperated fully while operating in strict compliance with all applicable Indian laws, maintaining active registration with the Financial Intelligence Unit. Delta Exchange similarly confirmed its cooperation, maintaining that its operations do not involve unauthorized cross-border transfers of virtual digital assets and that its dedicated rupee-settled platform for Indian users operates normally under its registration established in 2023.

India Financial System and Regulatory Scrutiny

This investigation compounds a challenging period for CoinDCX, which recently reported significant financial losses from retired wallets following earlier security incidents. Despite these regulatory hurdles, international backing continues, with Coinbase recently securing approval to expand its minority stake in the exchange's parent company.

Why it matters

The enforcement actions highlight intensifying regulatory oversight of cryptocurrency platforms operating within India's financial system, particularly regarding cross-border capital flows and derivatives trading. For users and market participants, the ongoing investigations underscore the strict enforcement of foreign exchange laws and compliance mandates governing digital assets.