Why CoinDCX, Delta Exchange Have Drawn ED’s Scrutiny for Offering Futures, Tokenised US Stocks
The Enforcement Directorate (ED) has intensified its investigation into cryptocurrency platforms CoinDCX and Delta Exchange India over alleged violations of India’s foreign exchange regulations. The agency conducted searches at three premises in Bengaluru on November 4 and 5, 2026, focusing on suspected unauthorised cross-border transactions involving cryptocurrency derivatives and tokenised foreign stocks.
The central issue is not simply that these platforms offered cryptocurrency trading. Investigators are examining whether the companies used overseas cryptocurrency exchanges and stablecoins to provide Indian customers with financial products without following the regulatory framework governing international transactions.
How the alleged transactions worked
According to the ED, customers deposited Indian rupees into CoinDCX accounts, which were subsequently converted into USDT, a stablecoin pegged to the US dollar. These stablecoins were allegedly transferred to overseas cryptocurrency exchanges, including Binance, KuCoin, Gate.io and Bybit, to execute customer trades.
The agency alleges that some of these transactions were routed through accounts maintained in the name of a Costa Rica-based entity associated with CoinDCX. Investigators have described this entity as a paper entity allegedly used to facilitate overseas transactions while circumventing India’s prescribed foreign exchange framework.
The ED is also examining the use of application programming interfaces (APIs), which allegedly enabled customer orders placed on CoinDCX to be executed directly on foreign cryptocurrency exchanges.
Why cryptocurrency futures and options attracted attention
Futures and options are financial contracts that allow traders to speculate on the future price of an asset without necessarily purchasing that asset.
The ED alleges that when customers opened cryptocurrency futures or options positions on CoinDCX, corresponding positions were opened on overseas exchanges. These positions were allegedly matched on a one-to-one basis, with subsequent closing and settlements taking place through foreign platforms.
Investigators are examining whether this arrangement effectively facilitated international financial transactions without complying with the applicable FEMA requirements.
The agency has also raised questions about the foreign exchange accounts, overseas crypto holdings and transaction fees associated with these arrangements. It alleges that CoinDCX paid hundreds of crores of rupees in fees to overseas exchanges through stablecoins such as USDT.
Why tokenised US stocks became another major concern
Another significant aspect of the investigation involves tokenised stocks linked to international companies such as Apple, Google and Tesla.
Tokenised stocks are digital tokens designed to provide economic exposure to traditional financial assets. However, holding a token representing exposure to a company’s shares does not automatically mean that the investor owns the actual underlying shares.
The ED alleges that CoinDCX customers were not directly purchasing the underlying foreign shares. Instead, their orders were being executed as derivative positions on Hyperliquid, an overseas decentralised cryptocurrency trading platform.
According to the agency, Indian rupee deposits were converted into USDT and used to open corresponding positions on the overseas platform.
This has raised questions about whether these products should be treated as international securities exposure or cryptocurrency-based derivatives, and whether the platforms had the necessary regulatory permissions to offer them to Indian customers.
Why Delta Exchange is also under investigation
The investigation has also brought Delta Exchange India, operated by Excelium Technologies Private Limited, under scrutiny.
According to the ED, a substantial volume of Delta Exchange’s cryptocurrency futures, options and tokenised stock transactions was allegedly routed through CoinDCX. CoinDCX then reportedly executed corresponding transactions on overseas cryptocurrency exchanges.
The agency has estimated that the cross-border transaction volumes involving the two platforms ran into several thousand crores of rupees.
Investigators are separately examining alleged transfers of hundreds of crores of rupees by Delta Exchange India to its overseas associate entities.
Which Indian laws could be involved?
The primary focus of the investigation is the Foreign Exchange Management Act (FEMA), 1999, which regulates foreign exchange transactions and cross-border financial activities in India.
The ED is also examining whether the products offered by these platforms could raise compliance concerns under the Securities Contracts (Regulation) Act, 1956, the SEBI Act, 1992, and the Reserve Bank of India Act, 1934.
The distinction is important because registration with the Financial Intelligence Unit of India (FIU-IND) for anti-money-laundering compliance does not automatically provide permission to offer every type of financial product or conduct unrestricted international transactions.
What have the companies said?
CoinDCX has confirmed that ED officials visited its Bengaluru office and stated that it cooperated with the authorities by providing the requested information and assistance. The company has maintained that it is registered with FIU-IND and complies with applicable Indian laws, including FEMA.
Delta Exchange India has also confirmed the ED’s visit and stated that it fully cooperated with investigators. The company has maintained that its trading, deposits and withdrawals continue normally, that customer funds remain secure in Indian banks, and that it complies with applicable KYC and anti-money-laundering requirements.
What happens next?
The investigation could have wider implications for India’s cryptocurrency industry, particularly exchanges offering leveraged derivatives, international market exposure and tokenised financial products.
If the ED establishes violations, the matter could lead to further regulatory proceedings and potential enforcement action. It could also encourage greater scrutiny of how Indian cryptocurrency platforms manage overseas liquidity, foreign exchange transactions and international trading partnerships.
For now, the investigation remains ongoing. The allegations made by the ED have not been established as findings of guilt, and the searches do not by themselves establish that customer funds have been lost or that either platform must shut down.
The broader question facing India’s cryptocurrency industry is whether platforms can offer sophisticated international financial products to domestic customers through overseas crypto infrastructure without falling foul of India’s existing foreign exchange and securities regulations.
