ED searches crypto firms Mudrex and Instadapp over alleged FEMA breaches
The ED searched premises linked to crypto platforms Mudrex and Instadapp on 27 October 2026, alleging unauthorised cross-border money transfers in breach of FEMA.
Key points
- The ED's Bengaluru office searched premises in Bengaluru and Madhya Pradesh on 27 October 2026 under FEMA, India's foreign exchange law.
- The ED alleges unauthorised crypto balances on foreign platforms of more than Rs 4,600 crore at the company that runs Mudrex.
- The ED calls these preliminary findings and says its investigation is continuing; nothing has been proved against either business.
The Enforcement Directorate (ED) searched premises in Bengaluru and one in Madhya Pradesh on 27 October 2026 under the Foreign Exchange Management Act, 1999 (FEMA), India's foreign exchange law. According to the ED's release of 29 October 2026, the searches concerned alleged unauthorised cross-border money transfers using crypto tokens, especially stablecoins such as USDT and USDC. They covered two businesses: RPFAS Technologies Private Limited, which runs the Mudrex and Saber.money platforms, and the crypto lending platform Instadapp.
What Happened
The ED said its probe into RPFAS Technologies began on complaints alleging large-scale FEMA violations. According to the agency, the company advertised instant cross-border money transfers using crypto without being authorised by the RBI. The ED described the alleged method: a user deposits money in the company's bank account, the money buys stablecoins, and these are sold on Indian crypto exchanges, with the proceeds paid to the receiver. The agency alleges the use of large over-the-counter deals, shell entities incorporated in Canada, Lithuania and the US, and foreign crypto platforms. Its preliminary findings allege unauthorised crypto balances on foreign platforms of more than Rs 4,600 crore.
On Instadapp, which now operates largely under the name "Fluid", the ED alleges that its US-registered company is a paper entity and that the platform is run from India. The agency alleges that income and investor funds were routed through entities in the British Virgin Islands, Singapore and Dubai and brought into India as software and consultancy fees that it calls bogus. The ED puts the alleged FEMA contraventions here at about USD 40 million, on preliminary investigation.
These are allegations, not findings of guilt; the accused are presumed innocent until proven guilty in court, and due process continues. The ED said further investigation is in progress.
What It Means
FEMA governs how money may move into and out of India. According to the ED, entities offering cross-border transfers through crypto in this way do not comply with the RBI's rules for inward and outward remittances, and route their business through related foreign entities controlled from India. The release does not say that any user's money has been frozen, or that either platform has been ordered to stop operating.
This report describes enforcement actions and allegations on the public record, attributed to the officials cited. An order, FIR or chargesheet is not a conviction; parties are presumed innocent until proven guilty.
Named in this report, or spotted an error? Corrections and responses: editor@oquilia.com. We correct errors promptly and record responses from named parties.
Sources & Citations
- Enforcement Directorate press release — Enforcement Directorate