The Bengaluru branch of the Enforcement Directorate began a major investigation into alleged illegal cryptocurrency transactions worth over ₹5,000 crore. On October 27, 2026, the agency conducted searches at three sites in Bengaluru and Madhya Pradesh under the Foreign Exchange Management Act.

The investigation focuses on alleged cross-border financial activity, such as foreign transfers made through Bybit and Binance, cryptocurrency, large over-the-counter transactions, and offshore shell companies. The probe has revealed several alleged FEMA violations.

ED Searches Three Locations in Bengaluru & Madhya Pradesh

On October 27, 2026, the Enforcement Directorate searched three locations in Madhya Pradesh and Bengaluru as part of its investigation into possible illegal cryptocurrency transactions.

ED Bengaluru conducted the operation in compliance with the Foreign Exchange Management Act of 1999. An estimated ₹5,000 crore worth of financial transactions using cryptocurrency and unauthorised cross-border transfers are the subject of the inquiry.

The volume of transactions has raised questions about the flow of cryptocurrencies through foreign financial networks. The ED is investigating how these transactions were carried out and whether the agreements violated FEMA regulations about cross-border financial transactions and foreign exchange movement.

₹5,000 Crore Crypto Transactions Under FEMA Investigation

The alleged movement of almost ₹5,000 crore through illegal cross-border cryptocurrency financial transactions is the main focus of the inquiry.

The Enforcement Directorate claims that the transactions involved the use of cryptocurrency to enable cross-border financial transfers. To find possible infractions of foreign currency laws, investigators are looking at how these transactions are structured and carried out.

The case centres on a FEMA investigation into cryptocurrency-based international payments, with the agency examining the alleged methods of money transfers overseas.

Instead of concentrating only on cryptocurrency trading, the study focuses on the financial arrangements that underlie these transfers. ED has discovered a number of linked techniques purportedly employed to make money transfers outside of India easier.

प्रवर्तन निदेशालय बेंगलुरु ने 27.10.2026 को बेंगलुरु और मध्य प्रदेश में 3 जगहों पर फेमा के तहत तलाशी अभियान चलाया। यह मामला क्रिप्टोकरेंसी का इस्तेमाल करके सीमा पार किए गए लगभग ₹5,000 करोड़ से अधिक के अनधिकृत वित्तीय लेन-देन से जुड़ा है। जांच में पता चला है कि फेमा के नियमों का उल्लंघन करते हुए, टैक्स हेवन देशों में 'शेल कंपनियों' (फर्जी कंपनियों) का इस्तेमाल किया गया, बड़े पैमाने पर ओवर-द-काउंटर सौदे किए गए और बायनेन्स व बायबिट जैसे प्लेटफॉर्म के जरिए अवैध रूप से विदेश में भुगतान किए गए।

— ED (@dir_ed) November 2, 2026

Offshore Shell Companies & Large OTC Deals Identified

The investigation has reportedly revealed that the use of shell businesses established in countries with tax havens enabled the alleged transactions.

According to the ED, these organisations were allegedly involved in arrangements involving substantial over-the-counter cryptocurrency transactions. OTC transactions allow parties to conduct trades directly rather than through conventional exchange order books.

Investigators have discovered that the alleged financial network includes a number of over-the-counter transactions. The use of offshore shell companies in connection with large OTC transactions is a crucial component of the investigation into the structure of the purported cross-border transfers.

The agency is examining these arrangements in connection with suspected violations of FEMA provisions. The reported findings indicate that investigators are looking beyond individual cryptocurrency transactions to examine the companies and financial structures allegedly supporting them.

Binance & Bybit Linked to Alleged Foreign Payments

Binance and Bybit have also been identified by the Enforcement Directorate in relation to the alleged illegal global payments.

The government claims that these cryptocurrency platforms were used to make payments overseas, which is against FEMA regulations. The platforms are included in the transaction trail that is being investigated in relation to potential cross-border financial activities worth about ₹5,000 crore.

The main components that ED found in its analysis include the purported use of Binance and Bybit, offshore shell corporations, and large OTC transactions.

These alleged financial arrangements are related to the searches carried out in Madhya Pradesh and Bengaluru. The transactions are being looked at by the government as possible violations of the Foreign Exchange Management Act of 1999.

The Enforcement Directorate has identified the suspected unauthorised transfers, offshore entities, OTC transactions and foreign payments as central aspects of the case. The investigation concerns alleged financial violations and does not by itself establish guilt.

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