ED Raids Crypto Platforms Mudrex and Instadapp Over Alleged FEMA Violations

The Directorate of Enforcement has searched four locations in Bengaluru and Madhya Pradesh as part of a foreign exchange violation investigation. Officials searched three premises in Bengaluru and one in Madhya Pradesh on October 27 under Section 37 of the Foreign Exchange Management Act.

Investigation Details

The inquiry focuses on entities linked to cryptocurrency platforms Mudrex and Instadapp. According to an ED press release issued on October 29, the probe started after complaints accused Bengaluru-based RPAS Technologies Private Limited of major FEMA violations. The company operates the Mudrex and Saber.money platforms. Investigators state that the platforms allowed people to bypass regular banking channels for moving money across borders. The agencies found that stablecoins like USDT and USDC were used to run an unauthorised international payment network. The platforms advertised quick money transfers across borders using crypto tokens without getting approval from the Reserve Bank of India.

Financial Scale

Preliminary findings show the platforms offered services to buy, sell, swap, and convert regular currency into crypto and back. The agency identified large over-the-counter deals connected to shell companies set up in countries like Canada, Lithuania, and the United States. These foreign platforms helped settle transactions through Indian bank accounts and paid for overseas expenses using digital assets. Unauthorised transfers and crypto balances on foreign platforms total more than ₹4,600 crore. The investigation into these digital asset transactions remains open.

Context

The Foreign Exchange Management Act regulates external trade and payments in India to support the orderly development of foreign exchange markets. Virtual digital assets like cryptocurrencies operate outside traditional banking networks, making them a key focus for financial regulators tracking cross-border money flows.