Indian authorities have intensified their scrutiny of cross-border digital asset movements, with the Enforcement Directorate (ED) revealing a probe into more than ₹5,000 crore, approximately $527 million, in cryptocurrency transfers. According to a press release attached to an X post on October 29, the agency identified unauthorized foreign payouts routed through major global exchanges, specifically naming Binance and Bybit. The ED’s Bengaluru office conducted searches at four locations on October 27, targeting violations of the Foreign Exchange Management Act (FEMA) and uncovering what it described as massive over-the-counter transactions and shell entities in tax havens.

Focus on Bengaluru-based platforms

The investigation centers on RPFAS Technologies Private Limited, a Bengaluru company that operates the Mudrex and Saber.money platforms. The ED stated that RPFAS bought and sold crypto on foreign venues, including the two named exchanges, resulting in preliminary estimates of FEMA contraventions exceeding ₹4,600 crore. These allegations stem from unauthorized cross-border transfers and crypto balances held on overseas platforms. In response to media inquiries, a Mudrex representative asserted that the company’s operations comply with all applicable laws and regulations. The representative further emphasized that the platform continues to function normally and that user funds remain secure, despite the ongoing regulatory scrutiny.

The recent searches were executed under FEMA, which classifies such violations as civil matters subject to penalties rather than criminal prosecution under money-laundering laws. This action follows a separate investigation by the same ED office in June, where six premises linked to crypto payment and remittance firms were searched. That earlier probe involved companies such as Transak Technology India and Buyhatke Internet, with alleged FEMA violations exceeding ₹2,500 crore and resulting in the freezing of approximately ₹6 crore in bank accounts. The current release also mentions the DeFi protocol Instadapp, which the ED noted now operates largely under the name Fluid, with alleged contraventions valued at around $40 million.

What to watch next

As of Friday afternoon, neither Binance nor Bybit had issued public comments regarding the ED’s statement, and no arrests, charges, or seizures were announced in the release. The situation remains fluid as the agency continues its assessment of the preliminary figures. Market participants and legal experts are likely to monitor whether the ED escalates the case to criminal proceedings or maintains its focus on civil penalties under FEMA. Additionally, the lack of response from Instadapp and Fluid leaves questions about their operational status in India unresolved, potentially influencing how other DeFi protocols engage with Indian regulatory frameworks in the coming months.