India Probes Binance and Bybit in $585 Million Crypto Remittance Case
Authorities investigate unauthorized cross-border transfers involving major crypto platforms and Indian fintech entities.
1Enforcement Directorate Launches Investigation
India’s Enforcement Directorate is investigating cross-border transactions totaling $585 million. The probe focuses on alleged violations of the Foreign Exchange Management Act. On October 27, agents searched four premises across Bengaluru and Madhya Pradesh. This action follows previous regulatory scrutiny of crypto exchanges, marking a significant escalation in oversight.
2RPFAS Technologies Under Scrutiny
The investigation centers on RPFAS Technologies, the operator of Mudrex and Saber.money. Authorities allege the firm facilitated $538 million in unauthorized overseas transfers. Customers reportedly converted fiat currency into stablecoins like USDT, bypassing official banking channels. These funds were then moved through various international crypto exchanges, including Binance and Bybit.
3Instadapp Protocol Allegations
Instadapp, operating as Fluid, faces a separate $40 million probe. The agency claims founder Sowmay Jain managed the protocol from India while presenting it as a US-based entity. Revenues allegedly flowed through the British Virgin Islands, Singapore, and Dubai before returning to India disguised as payments for software development fees.
4Global Network of Entities
The ED identified overseas entities linked to these transactions in the US, Canada, and Lithuania. By utilizing these international nodes, the firms allegedly circumvented Indian foreign exchange laws. The investigation seeks to map the flow of funds from Indian fiat deposits to stablecoin conversions and subsequent offshore transfers via exchanges.
5Historical Context of Crackdowns
This probe follows a series of regulatory actions against the crypto sector in India. In August 2022, the agency searched premises linked to CoinSwitch Kuber. Furthermore, in December 2023, authorities moved to block access to nine offshore platforms, including Binance, citing anti-money laundering compliance issues and lack of proper registration.
6Binance Regulatory Compliance Status
Binance registered with India’s Financial Intelligence Unit in 2024 following previous access restrictions. Despite this registration, the exchange was subsequently fined ₹188.2 million for alleged anti-money laundering violations. These ongoing legal challenges highlight the complex regulatory environment facing global crypto platforms operating within the Indian market and its financial borders.
7Tax and Legal Precedents
The current investigation builds upon earlier tax enforcement efforts. In January 2022, tax authorities raided six Indian crypto exchanges, uncovering approximately $9.4 million in unpaid taxes. These historical actions demonstrate a consistent pattern of scrutiny by Indian regulators regarding the financial transparency and tax compliance of domestic crypto-related business operations.
8Legal Status of Allegations
It is important to note that the allegations presented by the Enforcement Directorate have not yet been established as findings of guilt. The investigation is ongoing, and the companies involved have not been convicted of any crimes. These developments represent the current regulatory stance on cross-border digital asset transactions in India.