The Enforcement Directorate (ED) has launched a probe into alleged breaches of the Foreign Exchange Management Act (FEMA) involving cryptocurrency payments exceeding Rs 5,000 crore. The investigation focuses on unapproved cross-border transfers via crypto platforms Mudrex, Saber.money, and Instadapp's Fluid protocol, uncovering suspected use of shell companies and over-the-counter crypto deals.
- ED searches four locations targeting crypto-related FEMA breaches
- Platforms involved include Mudrex, Saber.money, and Instadapp’s Fluid
- Investigation uncovers illicit foreign payouts and shell entities
What happened
On October 27, 2026, the Enforcement Directorate conducted searches at three premises in Bengaluru and one in Madhya Pradesh linked to alleged unauthorised cross-border cryptocurrency transactions. These actions were undertaken under Section 37 of the Foreign Exchange Management Act, 1999 (FEMA). The investigation centers on transactions worth approximately Rs 5,000 crore involving Bengaluru-based RPFAS Technologies, which operates the Mudrex and Saber.money platforms, as well as Instadapp’s Fluid protocol.
The probe found that these entities facilitated cross-border payments using cryptocurrency stablecoins such as USDT and USDC, bypassing India’s regulatory framework and the Reserve Bank of India’s authorized channels. The ED highlighted the use of shell companies in tax haven jurisdictions and the execution of extensive over-the-counter (OTC) crypto deals and illegal foreign payouts, raising suspicions of systemic FEMA violations.
Why it matters
This investigation underscores the growing scrutiny Indian regulators are applying to cryptocurrency platforms, especially those enabling cross-border payments outside authorized financial systems. The ED's findings point to sophisticated methods employed to evade FEMA regulations, including the misapplication of crypto tokens for instant international money transfers and the establishment of complex corporate structures abroad.
What to watch next
Further investigation outcomes are pending, with no arrests or official charges announced as of now. Market participants should monitor upcoming disclosures from the Enforcement Directorate for updates on enforcement actions, potential penalties, or regulatory reforms prompted by this case.
Additionally, responses from the implicated platforms Mudrex, Saber.money, and Instadapp could shape sector dynamics, influencing investor confidence and compliance approaches within India’s crypto ecosystem. The case may also accelerate regulatory clarity around crypto cross-border payments and stablecoins.