India's ED Searches CoinDCX and Delta Exchange Offices

India's Enforcement Directorate (ED) searched three sites in Bengaluru on Nov. 4 and 5 linked to the exchanges CoinDCX and Delta Exchange India. The agency alleges that customer trades on both platforms were pushed to offshore venues, including Binance and Bybit, outside Indian rules, according to Free Press Journal and Bitcoin.com News.

Details

The searches were carried out under Section 37 of the Foreign Exchange Management Act (FEMA). The probe covers Neblio Technologies, which operates CoinDCX, and Excelium Technologies, which operates Delta Exchange India. The ED says customers' rupees were converted into USDT and sent to an account in the name of a Costa Rica-based entity that the agency suspects is a paper company. Through it, mirror positions were allegedly opened 1:1 against customer orders on Binance, KuCoin, Gate.io and Bybit.

The activity spans spot trading, futures and options on crypto tokens, and tokenized shares of foreign companies. The agency puts the volumes at "thousands of crores" of rupees (one crore is 10 million). It also alleges both firms paid hundreds of crores of rupees in fees to foreign platforms in USDT, and that Delta Exchange routed some trades through CoinDCX. The ED flags possible breaches of securities and Reserve Bank of India laws as well.

Delta Exchange said it is operating as usual and in line with applicable law. CoinDCX had not commented at the time of publication. These are allegations by investigators; no court has ruled.

What this means for the market

The case shows Indian authorities looking beyond domestic exchanges to the routes that send order flow to large international venues. The named exchanges had not publicly responded in the reports. There is no direct effect on the bitcoin price; see the daily brief for the live price.

CoinDCX was in the news in October too, when we covered its $16 million loss and the dispute over its size.