ED searches CoinDCX and Delta Exchange: what users should know
The ED searched CoinDCX and Delta Exchange offices in Bengaluru over alleged FEMA breaches. What's alleged, what the firms say and what to do now.
What happened
The ED's Bengaluru Zonal Office searched three premises on 4 and 5 November under Section 37 of FEMA, 1999, according to the agency's post on X as reported by the Free Press Journal and Coinpedia. The companies involved are Neblio Technologies Pvt Ltd, which runs CoinDCX, and Excelium Technologies Pvt Ltd, which runs Delta Exchange India.
According to Business Today and the Free Press Journal, the ED alleges that:
- customers' rupee deposits were converted into USDT and sent abroad to place trades on foreign exchanges, including Binance, KuCoin, Gate.io and Bybit
- the trades went through an account held in the name of a Costa Rica-based company that the ED called a "paper entity"
- this covered spot trading, crypto futures and options, and tokenised shares of foreign companies such as Apple, Google and Tesla, each running into "thousands of crores" of rupees
- CoinDCX paid "hundreds of crores" in fees to foreign exchanges, and Delta's transfers to associate companies abroad are under scrutiny
The ED also says these products appear, at first look, to raise issues under the Securities Contracts (Regulation) Act, the SEBI Act and the RBI Act, and that it is examining this further. These are allegations made at the search stage. No court has ruled on them.
This is the ED's second FEMA crypto case in Bengaluru in two weeks, after searches over stablecoin transfers abroad on 27 October.
What the companies say
CoinDCX said ED officials visited its Bengaluru office "as part of a routine enquiry on 4th November". It said it is registered with FIU-IND and that trading, deposits and withdrawals "remain fully operational", Business Today reported.
Delta Exchange said it "cooperated fully", that it is operating "business as usual with no disruptions" and that user funds "remain secure in Indian banks", according to the same report.
Does this affect Indian users?
The ED's case is about how the platforms allegedly ran their products, not about customers. No account freeze or withdrawal limit has been reported. The bigger long-term question is whether crypto futures and tokenised US stocks, which have been advertised to Indian users, can continue in their current form if regulators decide they fall under securities or foreign exchange rules.
What to do now
- Don't panic-sell or rush withdrawals based on social media posts. Check the exchange's own app and official accounts.
- Download your statements, especially your futures and options trade history and TDS records. You will need them for your ITR either way.
- Ignore "recovery" or "refund" calls that mention the ED case. Agencies don't contact users to move funds. If you lose money, call 1930 or report at cybercrime.gov.in.
- Think about how much you keep on any one platform. Our guide on how to choose a crypto exchange in India covers what to check, and the CoinDCX exchange page tracks its status.
The tax angle
Gains from crypto futures and options are taxed differently from spot trades, and records matter. See how crypto futures and options are taxed in India. If you hold crypto on a foreign exchange yourself, you may need to report it in Schedule FA: foreign exchange accounts and Schedule FA.
What we're watching
Whether the ED files a formal case or attaches assets, whether either platform changes its derivatives or tokenised stock products, and whether SEBI or the RBI responds. We will update this story when there is official news. Follow every change on our policy watch.
Frequently asked questions
Are my funds on CoinDCX or Delta Exchange frozen?
No freeze has been reported. Both companies have said that deposits, withdrawals and trading are working normally. Check the app yourself before making large moves.
Have CoinDCX or Delta Exchange been charged with anything?
No. A FEMA search is an investigation step. The ED's claims are allegations, and neither company has been found to have broken the law.
Is trading crypto futures or tokenised US stocks illegal for me?
The ED's case is about how the platforms allegedly ran these products, not about individual users. The ED says it is examining them under securities and RBI law, so the rules may tighten. For personal advice, speak to a lawyer or CA.
Sources
Get the day’s crypto newsletters summarised on Telegram: Indefi Brief →
Was this guide helpful?