Rs 2,500-crore FEMA violation: ED raids crypto firms over illegal foreign transfers

3 min readBengaluruUpdated: Jun 21, 2026 12:11 PM IST

ED raids on Bengaluru-based crypto and fintech firms have exposed an alleged Rs 2,500 crore illegal cross-border money transfer network (Image generated using AI).

The Bengaluru unit of the Enforcement Directorate (ED) uncovered an illicit cross-border remittance racket worth over Rs 2,500 crore last week following coordinated searches across cryptocurrency and virtual digital asset (VDA) platforms.

The searches on June 17 targeted five prominent Bengaluru-based fintech companies operating as unauthorised payment system operators. Following the raids, the agency placed freeze orders on bank accounts holding roughly Rs 6 crore linked to the illicit operations.

“The preliminary finding during the investigation has revealed contravention of FEMA (Foreign Exchange Management Act) through unauthorised cross-border money transfer, amounting to more than Rs 2,500 crore,” the agency stated in a release Friday.

The agency targeted five companies operating under popular digital asset and remittance brand names.

Transak Technology India Pvt. Ltd. (Operating under the brand Transak)

Carretx Technologies Pvt. Ltd. (Operating under the brand Carret)

Mokshagna Technologies Pvt. Ltd. (Operating under the brand Xpat, formerly Remit2any)

Buyhatke Internet Pvt. Ltd. (Operating under the brand Onramp.money)

Abhibha Technologies Pvt. Ltd. (Operating under the brand Onmeta)

The ED launched an investigation following specific complaints alleging widespread violations of foreign exchange laws. Intelligence gathering revealed that these fintech startups were openly advertising instant international fund transfers on their websites and apps without holding the mandatory licences issued by the Reserve Bank of India (RBI).

The modus operandi

According to investigators, these entities offered “on-ramp” and “off-ramp” crypto services to circumvent traditional banking infrastructure.

On-ramp services: Allowing users to convert fiat currencies (such as INR, USD, or EUR) into digital tokens like Bitcoin or stablecoins like Tether (USDT).

Off-ramp services: Allowing users to liquidate digital assets back into cash and withdraw them directly into localised bank accounts.

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“Anyone who wants to transfer money has to register on these platforms. The money is to be deposited in the bank account of the company. The money will be used for purchase of VDA, especially stablecoins such as USDT. The VDA will be sold in India on Indian Crypto Exchanges, and the sale consideration from the same will be remitted to the receiver. The receiver also can claim TDS from the transaction,” the agency stated.

“Most of these entities are circumventing the official channel by operating through related entities registered in foreign jurisdictions and controlled and operated from India,” it added.

“The search operations undertaken by the directorate in these entities revealed use of large volume OTC (over-the-counter) deals in India-based crypto trading platforms, use of shell entities especially incorporated in known tax havens, use of foreign-based crypto trading platforms for unauthorised cross-border transfer of money,” the release said.