India's Enforcement Directorate Probes CoinDCX and Delta Exchanges

India's Enforcement Directorate conducted searches at the headquarters of CoinDCX and Delta Exchange India between November 4 and 5. The operation investigates violations of foreign exchange regulations related to cross-border crypto asset transactions conducted without official authorization.

The agency is investigating the use of stablecoins, specifically USDT, to transfer client funds to foreign platforms such as Binance and KuCoin. According to investigators, CoinDCX allegedly bypassed the Indian foreign exchange framework by using a shell company account in Costa Rica to process trade orders.

The investigation points to client futures and options positions being mirrored directly on global exchanges through programming interfaces. Furthermore, the offering of tokens representing shares of companies like Apple and Tesla allegedly occurred without proper legal registration.

Agents claim that billions of rupees were moved abroad to cover transaction fees and derivatives positions. The case is being handled under the Foreign Exchange Management Act of 1999, which strictly regulates the flow of capital out of Indian territory.

The inquiry highlights the growing regulatory scrutiny regarding the use of digital assets to circumvent capital restrictions in emerging markets. The enforcement action increases pressure on exchanges that operate bridges between the local financial system and global crypto platforms.