Bengaluru, October 29, 2026 (Yes Punjab News)
The Enforcement Directorate (ED) has conducted searches at four premises in Bengaluru and Madhya Pradesh as part of an investigation into alleged illegal cross-border remittances using cryptocurrencies and stablecoins involving violations of the Foreign Exchange Management Act (FEMA), 1999, amounting to more than $40 million, an official said on Thursday.
The ED’s Bengaluru Zonal Office carried out the searches on Wednesday under Section 37 of FEMA, 1999, at three premises in Bengaluru and one in Madhya Pradesh over alleged unauthorised cross-border financial transactions involving cryptocurrencies, according to an official statement.
The entities and brands covered by the searches included Mudrex, Saber.money, Fluid and Instadapp.
Preliminary findings indicated alleged FEMA violations involving unauthorised cross-border money transfers and cryptocurrency balances held on foreign platforms worth more than Rs 4,600 crore, the ED said.
The investigation was initiated following complaints alleging large-scale FEMA violations by Bengaluru-based RPFAS Technologies Private Limited, which operates the Mudrex and Saber.money platforms. According to the agency, the platforms used cryptocurrencies for unauthorised cross-border transactions and crypto trading.
The investigation found that entities facilitating cross-border money transfers through Virtual Digital Assets (VDAs) were not complying with regulations mandated by the Reserve Bank of India (RBI) for inward and outward remittances.
The ED said several entities allegedly bypassed official channels by operating through related companies registered in foreign jurisdictions but controlled and managed from India.
Based on evidence gathered during the searches and statements recorded under FEMA, the agency identified a suspected method of transferring money across borders through VDAs.
According to the ED, individuals seeking to transfer money register on the platforms and deposit funds into a company’s bank account. The funds are then used to purchase VDAs, particularly stablecoins such as USDT. These assets are subsequently sold on Indian cryptocurrency exchanges, and the proceeds are remitted to the intended recipients.
The searches also covered Instadapp, a decentralised finance (DeFi) smart protocol deployed on the Ethereum blockchain. The platform facilitates decentralised financial activities using crypto tokens, including lending, borrowing and swapping through smart contracts.
According to the ED, the investigation revealed that revenue generated by the Instadapp DeFi protocol, along with funds raised from investors, was received in the form of stablecoins in multi-signature wallets belonging to Interop Labs Limited, registered in the British Virgin Islands (BVI). The agency said these wallets were controlled by individuals based in India.
“The stable coins were sold in Independent Reserve Singapore and QCP Capital, Singapore, and the fiat proceeds are credited to the Singapore bank accounts of Upsurge Labs Pte and Bhindi Labs Pte which are group entities. From these bank accounts the money was routed to India as remittances for bogus software development and consultancy fees by India-based entities,” the ED said.
The agency further stated that prepaid cards issued by Singapore-based banks were used in India to meet expenses of India-based entities.
The search operation also revealed that funds from Singapore bank accounts were allegedly transferred to Dubai bank accounts belonging to the founders of the Instadapp DeFi platform.
Preliminary investigations estimated the alleged FEMA contraventions at $40 million, the ED said.
The agency described Instadapp as a crypto-based decentralised finance platform that functions like an online bank through software rather than physical branches and staff. Users can lend crypto tokens to earn interest, borrow against their existing holdings and exchange one token for another through automated programmes known as smart contracts.
Started in 2018, the platform now operates largely under the name Fluid. It earns revenue through fees charged on lending, borrowing and token-swapping transactions.
According to open-source data cited by the ED, the value of cryptocurrency held on the platform exceeds $1 billion, while cumulative fees have reached approximately $49 million. The platform also has its own cryptocurrency token, which was allocated to its founders, team members and early investors and can be sold on cryptocurrency exchanges, the agency added.
FOLLOW NOW
