India's Enforcement Directorate (ED), the country's financial crimes investigation agency, has raided cryptocurrency exchanges CoinDCX and Delta Exchange as part of a probe into alleged illegal cross-border transactions. The action underscores growing regulatory scrutiny of crypto platforms in India, particularly their compliance with foreign exchange rules and controls on cross-border fund transfers.

The ED is India's principal agency for investigating economic offences and money laundering. It enforces the Foreign Exchange Management Act (FEMA), which governs how money moves across India's borders and requires such transactions to pass through authorised dealers, and the Prevention of Money Laundering Act (PMLA), which targets the laundering of criminal proceeds. India has no standalone law governing crypto assets, leaving platforms to operate within these existing financial rules.

According to the agency, the searches were conducted on November 4 and 5, 2026, in Bengaluru, targeting three premises linked to the companies that operate the two exchanges. The ED disclosed the action in a press statement.

The agency alleges that CoinDCX converted customers' rupee deposits into USDT, a US dollar-pegged stablecoin issued by Tether that is widely used as a settlement unit on global trading venues, and routed the funds to overseas exchanges — including Binance, KuCoin, Gate.io and Bybit — to execute spot and derivatives trades. The alleged structure goes to the heart of exchange-control enforcement: value converted into a stablecoin and moved on blockchain networks bypasses the authorised dealers through which FEMA expects cross-border transactions to flow.

The ED further alleges that CoinDCX facilitated tokenised stock trading through the decentralised exchange Hyperliquid, while Delta Exchange routed a substantial volume of its derivatives and tokenised-stock trades through CoinDCX. Tokenised stocks give traders blockchain-based exposure to the price movements of listed shares, a product that sits outside India's regulated market infrastructure; the ED's citation of securities regulations alongside FEMA indicates the probe is examining both the currency flows and the nature of the products offered.

The probe covers transactions worth several thousand crore rupees — one crore equals 10 million rupees — and potential violations of FEMA, alongside other securities and financial regulations.

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

The investigation is ongoing. As it proceeds, further disclosures from the ED — including any findings on the alleged flows and whether they lead to enforcement action under FEMA or securities rules — and additional statements from the exchanges would clarify how the case develops. For India's crypto sector, the action signals that compliance scrutiny is centering on how platforms move funds across borders and on the products they offer.

Source: BitcoinKE