ED detects ₹2,500 crore FEMA breach in Bengaluru cross-border cryptocurrency remittance probe

Inspections were conducted on June 17 pursuant to Section 37 of FEMA. | Photo credit: da-kuk

The Enforcement Directorate (ED) has uncovered alleged violations of the Foreign Exchange Management Act (FEMA) involving over ₹2,500 crore after conducting searches at six premises in Bengaluru linked to cross-border cryptocurrency-based money transfers.

Searches were conducted on June 17 under Section 37 of FEMA at the offices of Transak Technology India Pvt. Ltd. (Transak), Carretx Technologies Pvt. Ltd. (Carret), Mokshagna Technologies Pvt. Ltd., Buyhatke Internet Pvt. Ltd. and Abhibha Technologies Pvt. Ltd.

According to the ED, the investigation was initiated on a complaint of alleged large-scale FEMA violations by Bengaluru-based entities using virtual digital assets (VDA) for cross-border transactions. Preliminary findings indicate that several firms were facilitating international money transfers through cryptocurrencies without permission from the Reserve Bank of India (RBI).

The agency said the entities offered “on-ramp” and “off-ramp” services that allow users to convert conventional currencies into crypto assets and vice versa. Investigators alleged that customers deposited money into company accounts, which were then used to purchase stablecoins. The digital assets were then sold through crypto exchanges, with the proceeds transferred to the beneficiaries.

The ED said none of the entities under investigation were authorized by the RBI to make cross-border transfers. They were not compliant with regulatory requirements such as purpose codes and Foreign Inward Remittance Certificates (FIRCs). The ED also alleged that some firms operated through related entities abroad to bypass official remittance channels.

In the case of Mokshagna Technologies, the ED reportedly found that funds collected from customers in the US were converted into crypto assets and transferred to Indian cryptocurrency trading platforms. The proceeds were then distributed to beneficiaries in India. The ED alleged that the operation was run by one US resident with the support of family members in India.

The agency also alleged that Transak transferred operating profits to a related US-based entity using virtual digital assets, while Carret facilitated cryptocurrency trading and conducted OTC transactions with foreign payment applications.

Investigations have uncovered shell companies in tax havens and foreign crypto platforms for unauthorized money transfers, the ED said in a statement. Bank accounts of around ₹ 6 crore have been frozen and further investigation is underway, he added.

Published – 19 Jun 2026 23:41 IST