ED raids 4 premises in Bengaluru, MP over $40 million illegal crypto remittances
Synopsis
The ED has raided four premises targeting Mudrex, Instadapp, Fluid, and Saber.money — alleging over $40 million in illegal cross-border crypto transfers routed through Singapore and Dubai to evade RBI regulations. The case exposes how India-controlled DeFi platforms are allegedly using offshore shells and stablecoins to move money outside official channels.
Key Takeaways
The Enforcement Directorate searched four premises in Bengaluru and Madhya Pradesh on 29 October 2025 under Section 37 of FEMA, 1999 .
Alleged FEMA contraventions exceed $40 million (over ₹4,600 crore ) in unauthorised cross-border crypto transactions.
Entities targeted include Mudrex , Saber.money , Fluid , and Instadapp , linked to RPFAS Technologies Private Limited .
Alleged modus operandi involved converting user deposits into USDT stablecoins , selling on Indian exchanges, and remitting proceeds to intended recipients.
Instadapp's offshore funds were allegedly routed via Singapore and Dubai bank accounts back to India as bogus consultancy fees.
Instadapp (Fluid) , launched in 2018 , reportedly holds over $1 billion in crypto assets and has earned approximately $49 million in total fees.
The Enforcement Directorate (ED) on Wednesday, 29 October 2025, conducted search operations at four premises — three in Bengaluru and one in Madhya Pradesh — targeting entities allegedly involved in unauthorised cross-border financial transactions using cryptocurrencies and stablecoins, in contravention of the Foreign Exchange Management Act (FEMA), 1999. Preliminary findings indicate FEMA violations amounting to more than $40 million (over ₹4,600 crore).
Entities Under the Scanner
The searches, carried out by the ED's Bengaluru Zonal Office under Section 37 of FEMA, 1999, targeted four platforms: Mudrex, Saber.money, Fluid (formerly Instadapp), and Instadapp. The investigation was triggered by complaints alleging large-scale FEMA violations by RPFAS Technologies Private Limited, a Bengaluru-based company that reportedly operates the Mudrex and Saber.money platforms. According to the ED, these platforms were being used for unauthorised cross-border transactions and crypto trading.
How the Alleged Modus Operandi Worked
Investigators say the entities were deliberately circumventing official remittance channels by operating through related companies registered in foreign jurisdictions but controlled from India. The alleged method involved users registering on the platforms and depositing funds into company bank accounts. Those funds were then used to purchase Virtual Digital Assets (VDAs) — specifically stablecoins such as USDT — which were subsequently sold on Indian crypto exchanges, with the sale proceeds remitted to the intended receiver.
None of these entities, according to the ED, complied with Reserve Bank of India (RBI) regulations governing inward and outward remittances. This is a significant regulatory concern, as the RBI mandates strict reporting and authorisation norms for all cross-border fund flows.
The Instadapp-Fluid Trail: Singapore, Dubai and Beyond
The search operations also covered Instadapp, a decentralised finance (DeFi) smart protocol deployed on the Ethereum blockchain, which provides a platform for lending, borrowing, and swapping crypto tokens through automated smart contracts. The ED found that revenue earned from the Instadapp DeFi protocol, along with funds raised from investors, was received as stablecoins in multi-signature wallets of Interop Labs Limited (BVI) — wallets allegedly controlled by India-based persons.
According to the ED's statement, these stablecoins were sold through Independent Reserve Singapore and QCP Capital, Singapore. The fiat proceeds were then credited to Singapore bank accounts of group entities Upsurge Labs Pte and Bhindi Labs Pte. From there, money was allegedly routed back to India disguised as payments for 'bogus software development and consultancy fees'. Additionally, prepaid cards of Singapore-based banks were reportedly used in India to cover local expenses, and funds from Singapore accounts were also channelled to Dubai bank accounts of the platform's founders.
Scale and Background of Instadapp-Fluid
The Instadapp platform, started in 2018, now operates largely under the name Fluid. It earns revenue from fees on loans, borrowings, and token swaps. Open-source data cited by the ED puts the value of crypto held on the platform at more than $1 billion, with total fees collected at approximately $49 million to date. The platform also has its own crypto token, distributed to founders, team members, and early investors.
What Happens Next
The ED has recorded statements under FEMA, 1999, and collected evidence during the searches. Further investigation is under way. This action is part of a broader regulatory push against crypto platforms operating outside India's formal financial framework — notably companies structured through offshore entities to avoid RBI oversight. With India's crypto regulatory environment still evolving, cases like this are expected to shape how authorities treat DeFi platforms and stablecoin-based remittance services in the months ahead.
Point of View
Hiding behind offshore shells and DeFi's pseudo-anonymity. The ED's focus on stablecoin-as-remittance is significant — regulators globally are grappling with the same loophole, and India's action could set a precedent for how DeFi protocols are treated under domestic FEMA law. What the investigation must establish is whether these were deliberate evasion structures or the predictable result of ambiguous regulation that never clearly addressed VDA-based cross-border flows. The answer matters, because over-criminalising regulatory grey zones risks driving the next generation of Indian crypto builders entirely offshore.
NationPress
29 Oct 2026
Frequently Asked Questions
Why did the ED raid Mudrex, Instadapp, and Fluid?
The ED raided these entities on 29 October 2025 on allegations of conducting unauthorised cross-border financial transactions using cryptocurrencies and stablecoins, in violation of FEMA, 1999. Preliminary findings suggest contraventions exceeding $40 million, with none of the platforms reportedly complying with RBI regulations for cross-border remittances.
What is FEMA and why does it apply to crypto transactions?
The Foreign Exchange Management Act (FEMA), 1999, governs all cross-border movement of funds by Indian residents and entities. It requires that inward and outward remittances be routed through RBI-authorised channels with proper reporting. Crypto-based transfers that bypass these channels are treated as FEMA contraventions, regardless of the technology used.
How was money allegedly moved illegally through these platforms?
According to the ED, users deposited money into company bank accounts; the funds were used to buy stablecoins such as USDT; the stablecoins were sold on Indian crypto exchanges; and the sale proceeds were remitted to the intended recipient — all outside official RBI-authorised channels. In Instadapp's case, funds were additionally routed through Singapore and Dubai entities before returning to India as bogus consultancy fees.
What is Instadapp, and how large is it?
Instadapp is a decentralised finance (DeFi) protocol launched in 2018 that now operates largely under the name Fluid. It allows users to lend, borrow, and swap crypto tokens via automated smart contracts on the Ethereum blockchain. Open-source data cited by the ED puts the value of crypto held on the platform at over $1 billion, with total fees of approximately $49 million.
What happens next in the ED investigation?
The ED has collected evidence and recorded statements under FEMA, 1999, during the search operations. Further investigation is ongoing. Depending on findings, the agency could issue show-cause notices, attach assets, or escalate to prosecution — standard steps in a FEMA enforcement action of this scale.
