Enforcement Directorate Searches Premises of Crypto Platforms Mudrex and Instadapp Over Alleged FEMA Violations
The Directorate of Enforcement conducted search operations across four premises linked to cryptocurrency platforms Mudrex and Instadapp in connection with alleged foreign exchange violations exceeding 4,600 crore rupees, according to an agency announcement issued on Thursday, October 29, 2026. Officers from the agency's Bengaluru Zonal Office executed the searches on October 27 under Section 37 of the Foreign Exchange Management Act, 1999, inspecting three locations in Bengaluru and one facility in Madhya Pradesh. The agency said the investigation concerned suspected cross-border stablecoin transactions conducted outside authorized banking and foreign-remittance channels.
Search Operations and Remittance Scrutiny
The primary investigation targeted Bengaluru-registered RPAS Technologies Private Limited, which operates digital asset platforms Mudrex and Saber.money. The Enforcement Directorate alleged that the company facilitated cross-border transfers without approvals it considered necessary under Reserve Bank of India rules. The operational mechanism required clients to deposit fiat funds into corporate bank accounts, which were subsequently converted into virtual digital assets, principally Tether USDT and USD Coin stablecoins. These digital assets were liquidated across domestic and international cryptocurrency exchanges to remit funds to recipients abroad, with investigators identifying extensive over-the-counter transactions involving shell entities incorporated in Canada, Lithuania, and the United States, alongside accounts on Binance and Bybit.
According to The 420.in, the Enforcement Directorate alleged that operators linked to Mudrex used entities in Canada, Lithuania and the United States to route transfers outside formal banking channels and hold assets on Binance and Bybit.
Decentralized Finance Operations and Founder Role
A parallel branch of the inquiry examined Instadapp, an Ethereum-based decentralized finance lending, borrowing, and swapping protocol associated with the Fluid platform. Although the enterprise was incorporated in Delaware as Instadapp Labs Inc., agency investigators alleged that founder Sowmay Jain and core development personnel managed day-to-day operations directly from India without maintaining operational offices or permanent staff abroad. Protocol revenues and international venture capital investments were allegedly received in multi-signature digital wallets registered to Interop Labs Limited in the British Virgin Islands, which remained under the active operational control of individuals located within India.
In 2018, decentralized finance protocol Instadapp was launched on the Ethereum blockchain, managing assets exceeding $1 billion and generating nearly $149 million in cumulative fees, according to The 420.in.
Offshore Structuring and Fund Laundering Channels
Investigative findings outlined an offshore routing network connecting entities in the British Virgin Islands, Singapore, and Dubai. Digital stablecoins were liquidated through Singapore-based crypto brokerages Independent Reserve and QCP Capital, with the resulting fiat currency deposited into Singaporean accounts belonging to affiliates Upsurge Labs and Bhindi Labs. Investigators alleged that funds were later transferred to India as consultancy and software-development payments, while Singapore-issued prepaid payment cards were utilized to cover domestic company expenditures. The Enforcement Directorate alleged that transfers and overseas balances under examination exceeded 4,600 crore rupees for the combined operations, with Instadapp transactions accounting for approximately 40 million dollars.