India Targets Crypto Payment Rails in $265M Transfer Probe

India's Enforcement Directorate (ED) has launched a probe into alleged crypto-linked transfers worth over $265 million. The investigation, which began on June 17, targeted six premises in Bengaluru linked to several companies including Transak Technology India and Carretx Technologies.

The ED alleged that these entities used cryptocurrency on-ramp and off-ramp services to move value across borders without Reserve Bank of India (RBI) authorization. The agency also froze bank accounts holding around ₹6 crore, worth roughly $635,000.

Stablecoins like USDT are at the center of the alleged transfer route, which involves converting fiat into cryptocurrency, moving it between jurisdictions, and converting it back into local currency. The ED claimed that the companies used shell entities in tax-haven jurisdictions and foreign crypto platforms to support these flows.

The probe is being handled under the Foreign Exchange Management Act (FEMA) rather than as a securities-market action. This puts India in line with other major markets, such as Brazil, which has recently moved to shut cryptocurrency out of regulated cross-border payment settlement under its eFX framework.