ED Flags Misuse Of CoinDCX Accounts In Cyber Fraud Money Trail

The Enforcement Directorate’s (ED) Hyderabad Zonal Office has provisionally attached INR 8.46 Cr across 92 bank accounts — including those linked to CoinDCX and multiple crypto wallets — under the PMLA (2002), as part of its probe into a nationwide cyber fraud network built on fake ecommerce platforms and deceptive investment apps.

According to the agency, proceeds of crime worth INR 285 Cr were routed through more than 30 short-lived bank accounts, many of which remained active only for 1–15 days before funds were moved again into over 80 secondary accounts to evade detection. A significant portion of these funds was then converted into cryptocurrency or channelled through hawala networks.

The ED’s money trail analysis found that fraudsters frequently bought USDT (Tether) on Binance’s peer-to-peer (P2P) marketplace using third-party payments originating from the scam proceeds. 

To arbitrage price differentials between exchanges, sellers on platforms such as WazirX, Buyhatke and CoinDCX allegedly purchased USDT at lower prices and resold it to the scammers on Binance P2P, accepting payments from crime-linked accounts.

Investigators also flagged that USDT worth INR 4.8 Cr was converted via CoinDCX through non-KYC accounts and unverified third-party transactions — a red flag in an industry where regulators have tightened scrutiny around identity verification and transaction tracing.

However, the ED’s statement does not allege wrongdoing by CoinDCX or its employees. Instead, it highlights misuse of the platform by unverified users, alongside similar misuse of other exchanges.

A CoinDCX spokesperson said the company maintains “zero tolerance for any misuse” of its platform. 

“The ED’s press release itself notes misuse of various platforms, including ours. Importantly, no wrongdoing has been attributed to CoinDCX. We continue to extend full cooperation to the authorities,” they added.

The attachment stems from multiple FIRs filed in Andhra Pradesh and other states, revealing a coordinated fraud network operating through bogus investment and part-time job apps — including NBC App, Power Bank App, HPZ Token, RCC App and Making App. 

Victims were lured via WhatsApp, Telegram or SMS, asked to deposit money through UPI into shell-entity accounts, shown small initial profits, and later blocked from withdrawals.

Once funds accumulated, they were rapidly layered through dozens of accounts before being routed into crypto assets.

The action comes shortly after CoinDCX raised an undisclosed sum from existing investor Coinbase at a post-money valuation of $2.45 Bn. The company, founded in 2018 by Sumit Gupta and Neeraj Khandelwal, claims over 2 Cr users across India and the UAE, 500+ crypto assets listed, and quarterly trading volumes exceeding INR 2.4 Lakh Cr.

As ED’s investigation continues, the exchange emphasises that it operates with a compliance-first framework and cooperates fully with authorities.