India’s Enforcement Directorate raids five crypto payment firms over ₹2,500 crore in alleged unauthorised cross-border transfers

India’s Enforcement Directorate has raided six premises linked to five Bengaluru-based crypto payment companies, alleging the firms facilitated more than ₹2,500 crore in unauthorised cross-border transfers by routing Indian rupees through USDT stablecoin transactions to bypass Reserve Bank of India approval requirements.

According to the ED, six premises connected to five crypto-related payment firms were searched under provisions of the Foreign Exchange Management Act (FEMA), 1999. Authorities allege the companies enabled large-scale cross-border transactions without obtaining the necessary regulatory approvals from the Reserve Bank of India (RBI).

The companies named in the investigation include Transak Technology India, Carretx Technologies (Carret), Mokshagna Technologies, Buyhatke Internet Pvt Ltd—the parent company of Onramp.money—and Abhibha Technologies, which operates Onmeta.

Investigators also froze approximately ₹6 crore held in bank accounts believed to be linked to the transactions under review.

ED alleges crypto platforms became unofficial remittance channels

At the center of the investigation is the ED’s claim that the companies effectively operated as informal international money transfer networks using cryptocurrency rails.

According to authorities, users would deposit Indian rupees into company-controlled bank accounts. Those funds were then used to purchase virtual digital assets, primarily USDT stablecoins. The crypto assets were subsequently transferred through blockchain networks, liquidated via over-the-counter transactions, and paid out as cash to recipients located outside India or vice versa.

The Enforcement Directorate alleges that these transactions bypassed critical reporting and compliance requirements that govern foreign exchange transfers.

Officials claim the firms conducted cross-border payment activities without filing purpose codes, securing Foreign Inward Remittance Certificates (FIRCs), or maintaining documentation required under FEMA regulations.

“The use of cryptocurrency cannot exempt entities from compliance with foreign exchange laws,” former RBI Deputy Governor R. Gandhi previously noted while discussing digital asset oversight in India. His comments reflect a broader regulatory stance that innovation must operate within established financial safeguards.

The case has intensified discussions around India crypto regulation, particularly concerning the legal status of crypto-enabled payment infrastructure and fiat gateways that connect digital assets with traditional banking systems.

Specific allegations against Transak, Carret and other firms

Among the entities named, Transak faces allegations that it converted profits generated in India into cryptocurrency and transferred those funds to its U.S.-based affiliate, Transak Inc., allegedly bypassing conventional banking channels.

Meanwhile, investigators claim Carret participated in over-the-counter crypto transactions involving overseas remittance applications that facilitated the movement of funds into India.

Authorities also outlined allegations against Mokshagna Technologies, stating that customers in the United States deposited funds that were converted into cryptocurrency before being transferred through Indian exchanges and ultimately paid out to recipients within India. The transactions were allegedly coordinated by an individual operating from the United States.

While the companies have yet to publicly respond in detail to all allegations, the investigation underscores the growing pressure facing crypto firms operating in regulatory gray areas.

The development comes at a critical time for India crypto regulation, as authorities seek to balance financial innovation with concerns surrounding money laundering, foreign exchange violations and illicit financial flows.

Crackdown comes amid a week of high-profile crypto enforcement actions

The Bengaluru searches did not occur in isolation.

They represent the third major crypto-related enforcement action undertaken by the ED within a single week.

Just days earlier, authorities arrested a suspect linked to an alleged ₹500-crore Ponzi scheme centered around a token known as Korvio Coin. Investigators claim the operation attracted more than 248,000 investors through a multi-level marketing structure.

In a separate case, the agency filed a prosecution complaint connected to a phishing operation targeting users of crypto exchange Coinbase. The scheme was allegedly linked to Indian national Chirag Tomar, who is already serving a prison sentence in the United States after admitting involvement in a fraud that reportedly stole more than $20 million from victims through fake Coinbase login portals.

The rapid succession of enforcement actions suggests regulators are taking a more aggressive approach toward digital asset-related misconduct.

For market participants, the message is becoming increasingly clear: compliance expectations are rising even as comprehensive India crypto regulation remains under development.

India pushes toward a clearer crypto framework

Despite being one of the world’s largest crypto markets by user adoption, India still lacks a dedicated licensing regime for cryptocurrency exchanges and service providers.

Instead, authorities have relied on taxation and anti-money laundering measures to oversee the industry.

In 2022, the government introduced a 30% tax on crypto gains while preventing investors from offsetting losses against profits. It also imposed a 1% Tax Deducted at Source (TDS) on crypto transactions, a policy that significantly impacted domestic trading volumes.

A year later, virtual asset service providers were brought under India’s anti-money laundering framework, requiring compliance standards similar to those applied to banks and financial institutions.

Industry leaders have repeatedly called for greater regulatory clarity. Nandan Nilekani, co-founder of Infosys, has previously advocated for responsible innovation in digital infrastructure, while policymakers continue evaluating how cryptocurrencies should fit into India’s broader financial ecosystem.

The latest ED operation demonstrates why policymakers believe stronger oversight is necessary. Historically, authorities have focused on fiat on-ramp and off-ramp providers because they represent the most visible connection between traditional currency and digital assets.

As investigations continue, the case is likely to influence future discussions surrounding India crypto regulation, particularly regarding cross-border payments, stablecoin usage and the responsibilities of crypto service providers.

For now, the raids serve as a stark reminder that enforcement is advancing even before a comprehensive regulatory framework is fully established. And with regulators increasingly focused on crypto-enabled money movement, the future direction of India crypto regulation may be shaped as much by enforcement actions as by legislation itself.