The Directorate of Enforcement has uncovered alleged violations of the Foreign Exchange Management Act (FEMA) worth more than ₹2,500 crore during an investigation into cryptocurrency-based cross-border money transfers. The agency carried out searches at six premises in Bengaluru connected to five companies operating crypto payment and remittance platforms.
According to the ED, the companies were allegedly facilitating international fund transfers using virtual digital assets while operating outside the regulatory framework established by the Reserve Bank of India (RBI).
ED Targets Bengaluru-Based Crypto Platforms
The searches were conducted on June 17 under Section 37 of FEMA at premises linked to Transak Technology India Pvt. Ltd., Carretx Technologies Pvt. Ltd., Mokshagna Technologies Pvt. Ltd., Buyhatke Internet Pvt. Ltd., and Abhibha Technologies Pvt. Ltd.
These companies operate platforms and services under brands including Transak, Carret, Xpat, Onramp.money, and Onmeta.
The investigation reportedly began after a complaint alleged that Bengaluru-based entities were enabling unauthorised international money transfers through cryptocurrencies. Following the complaint, the ED gathered intelligence that pointed to widespread use of crypto assets for cross-border transactions outside approved channels.
How the Alleged Transfer Network Worked?
According to the agency, the firms offered both on-ramp and off-ramp services. These services allowed customers to convert traditional currencies such as the Indian Rupee and US Dollar into cryptocurrencies and stablecoins, and later convert those digital assets back into fiat currency.
Investigators said customers would deposit money into the company's bank accounts. The funds were then allegedly used to purchase virtual digital assets, particularly stablecoins such as USDT, and in some cases other cryptocurrencies, including Bitcoin.
The digital assets were then sold through crypto exchanges and trading platforms. The proceeds were transferred to beneficiaries, creating what the ED describes as a mechanism for moving funds across borders without using authorised remittance channels.
The agency further alleged that some recipients were able to claim Tax Deducted at Source (TDS) benefits linked to these transactions.
Allegations Against Individual Companies
The ED outlined separate allegations against multiple entities under investigation.
In the case of Mokshagna Technologies, which operates the Xpat platform, investigators alleged that funds collected from customers in the United States were converted into virtual digital assets and routed through Indian crypto trading platforms. The assets were reportedly sold through large over-the-counter transactions before proceeds were distributed to recipients in India. The agency claimed the operation was managed by a person based in the United States with assistance from family members in India.
For Transak Technology India, the ED alleged that the company facilitated off-ramp services without RBI approval. Investigators claim operational profits were converted into virtual digital assets and transferred to wallets associated with Transak Inc. USA.
Meanwhile, Carretx Technologies was accused of facilitating crypto trading through its mobile application while also conducting over-the-counter transactions with foreign remittance applications to enable unauthorised inward transfers into India.
Shell Companies and Overseas Links Under Scrutiny
The investigation also uncovered what the ED described as a broader network involving foreign crypto platforms, shell companies incorporated in tax havens, and large volume over-the-counter crypto transactions.
Officials alleged that some firms used related entities incorporated abroad but controlled from India to bypass mandatory compliance requirements. The agency said the companies did not follow regulatory obligations such as obtaining purpose codes and Foreign Inward Remittance Certificates (FIRC) required for authorised cross-border remittances.
According to the ED, none of the entities under investigation were authorised by the RBI to carry out such remittance activities.
Assets Frozen as Probe Continues
As part of the enforcement action, the agency imposed restraint orders on several bank accounts linked to the companies. Balances worth approximately ₹6 crore have been frozen pending further investigation.
The ED stated that its preliminary findings indicate suspected FEMA violations involving more than ₹2,500 crore, with the investigation continuing to examine the full scale of the transactions and the entities involved.