📅 30 October 2026 • Enforcement Directorate India • ED Searches Mudrex and Instadapp Sites Over Alleged $520 Million FEMA Violations Routed Through USDT and USDC
India's Enforcement Directorate said its Bengaluru Zonal Office searched three premises in Bengaluru and one in Madhya Pradesh on October 27 under Section 37 of the Foreign Exchange Management Act, 1999. A press release dated October 29 framed the action as part of a probe into unauthorised cross-border money transfers executed with cryptocurrencies, particularly stablecoins, and into whether they bypassed channels authorised by the Reserve Bank of India.
What the preliminary findings indicate
According to the Directorate, the probe opened on complaints against RPAS Technologies Private Limited, the Bengaluru firm operating Mudrex and Saber.money. Preliminary findings indicate that unauthorised cross-border transfers plus crypto balances on foreign platforms exceed INR 4,600 crore, roughly $520 million. Customers allegedly deposited rupees into company bank accounts, the funds bought virtual digital assets, above all USDT, and those assets were sold on Indian exchanges before proceeds were remitted. Instant transfers were advertised without RBI authorisation.
Shell companies, OTC desks and offshore venues
The Directorate alleged that large over-the-counter transactions were routed through shell companies registered in Canada, Lithuania, the United States and other jurisdictions, and settled via Indian bank accounts in contravention of FEMA. In its post on X, the ED put the overall figure above INR 5,000 crore and cited shell entities in tax-haven jurisdictions and foreign payouts through platforms including Binance and Bybit.
The separate Instadapp track
A second line of inquiry concerns the DeFi protocol Instadapp and its associated platform Fluid, where preliminary investigations indicate FEMA contraventions of about $40 million. Investigators alleged that protocol revenue and investor funding arrived as stablecoins in multi-signature wallets of Interop Labs Limited, registered in the British Virgin Islands and controlled from India, then were sold through Singapore counterparties. No arrests were reported and no adjudicating authority has tested the claims.
IMPACT
For compliance teams the reading is direct. Virtual asset service providers serving Indian users are tested on whether on-ramp and off-ramp flows stay inside RBI-authorised remittance rails, with source-of-funds evidence expected at desk level. OTC desks and stablecoin operators should assume that corporate vehicles abroad, multi-signature wallet control and prepaid cards are traceable in a foreign exchange file. Indian partner banks carry the sharpest exposure, since settlement through local accounts turns a crypto transfer into a FEMA matter. Every figure here remains an allegation.
Sources: The Hindu (30 October 2026), Inc42, Livemint, CoinEdition and crypto.news, reporting an Enforcement Directorate press release dated 29 October 2026.
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