ED raids crypto platforms over alleged ₹4,600-crore FEMA violations

The Enforcement Directorate (ED) conducted searches at multiple locations connected to cryptocurrency trading platforms Mudrex and Instadapp on Wednesday, as part of a probe into alleged breaches of the Foreign Exchange Management Act (FEMA). The action targets suspected foreign exchange violations valued at approximately ₹4,600 crore, according to ED sources.

The raids were initiated following preliminary investigations that suggested the platforms may have facilitated unauthorized cross-border financial transactions without proper regulatory compliance. Cryptocurrency exchanges operating in India are required to adhere to stringent FEMA norms and obtain necessary approvals before engaging in forex-related activities.

Both platforms have emerged as prominent players in India's digital asset trading ecosystem over recent years. The ED's action underscores the regulatory authorities' intensified scrutiny of the cryptocurrency sector, particularly regarding compliance with foreign exchange rules and anti-money laundering requirements.

The investigation is ongoing, with authorities examining transaction records, user data, and operational documents seized during the searches. This development comes amid broader regulatory pressure on the crypto industry in India, where authorities have consistently emphasized the need for stricter oversight to prevent financial crimes and unauthorized capital flows.

Neither Mudrex nor Instadapp has yet issued a formal statement regarding the ED operations. The case is expected to provide further clarity on compliance standards expected from cryptocurrency platforms operating within Indian jurisdiction.