ED probes crypto cross-border transfers: what the FEMA searches mean
The ED searched premises in Bengaluru and Madhya Pradesh over alleged stablecoin transfers abroad. What's alleged, and what it means for crypto users.
- Checked against the rules: Oct 2026
- Sources cited · No buy or sell calls
What the ED says
The Enforcement Directorate's Bengaluru office searched four premises on 27 October 2026 under Section 37 of the Foreign Exchange Management Act (FEMA). It alleges that services were used to move money across borders by converting rupees into stablecoins such as USDT and USDC, transferring them abroad and converting them back, outside channels authorised by the Reserve Bank of India.
Media reports put the alleged transfers at more than ₹4,900 crore and have named crypto platforms linked to the case. The companies have not been found guilty of anything; the investigation is ongoing.
Not the first case
In June 2026, the ED searched premises linked to five Bengaluru platforms over alleged cross-border crypto transfers of more than ₹2,500 crore, and restrained bank accounts.
What it means for regular users
- Buying and holding crypto is not the issue. These cases concern alleged cross-border money transfers outside RBI rules.
- Be careful with "instant international transfer" services that use crypto. Sending money abroad has to follow FEMA and LRS rules.
- Freelancers paid in USDT should take advice on how they receive and convert foreign income. Freelancers paid in crypto.
- Large P2P trades can draw scrutiny and lead to bank freezes. How to reduce the risk.
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Sources
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