The Enforcement Directorate (ED) has uncovered evidence of unauthorised international cryptocurrency transactions during raids on CoinDCX and Delta Exchange in Bengaluru. The raids, conducted on November 4 and 5, targeted three premises linked to these platforms over allegations of violating foreign exchange regulations (FEMA) through derivative trading in crypto tokens and Real World Asset (RWA) tokens.
The investigation began after reports of large-scale FEMA violations by Neblio Technologies Private Limited, which operates CoinDCX, and Excelium Technologies Private Limited, which runs Delta Exchange. The ED found that both platforms were offering derivative trading in crypto tokens, including Futures and Options, and trading in tokenised stocks of foreign entities without proper authorisation.
The ED noted that these platforms used stablecoins like USDT for derivative trading and tokenised stock trading on foreign crypto platforms such as Binance, KuCoin, Gate.io, and Bybit. Search operations revealed that CoinDCX was paying hundreds of crores of rupees in transaction fees to foreign platforms, routed through stablecoins in violation of FEMA regulations.
Delta Exchange was found to be routing a large volume of its derivative trading through CoinDCX, with cross-border transactions amounting to several thousand crores of rupees. The ED also discovered that Delta Exchange was transferring hundreds of crores to its associate entities abroad, which is currently under investigation.
The search operations further revealed that the fintech products offered by these platforms may contravene norms under the Securities Contracts (Regulation) Act, 1956, SEBI Act, 1992, and RBI Act, 1934.