India’s Enforcement Directorate (ED) says it searched four premises in Bengaluru and Madhya Pradesh on 27 October 2026, under Section 37 of the Foreign Exchange Management Act (FEMA). The targets were RPFAS Technologies, the Bengaluru company behind the Mudrex app and Saber.money, and separately the DeFi protocol Instadapp, now largely called Fluid. The agency announced it on X on 29 October with a headline figure of “more than ₹5,000 crore”.
Most coverage stopped at the big number. The more useful question for anyone who holds crypto on an Indian app is narrower: what exactly is the ED accusing the company of, and does any of it touch an ordinary user’s holdings?
What the ED actually alleges
According to the ED release, as reported by ETV Bharat/IANS, the complaint is about remittances, not trading. The agency describes this sequence:
- A user registers on the platform and deposits money into the company’s bank account.
- That money buys a stablecoin, mainly USDT.
- The stablecoin is sold on Indian crypto exchanges, and the proceeds are paid to a receiver.
The ED says the company advertised “instant” cross-border transfers this way without any authorisation from the Reserve Bank of India, and ran parts of the business through related entities abroad. Crypto Times, citing the release, lists shell entities in Canada, Lithuania and the US, large over-the-counter deals, and the use of Binance and Bybit. Preliminary findings put unauthorised transfers and foreign-platform crypto balances at more than ₹4,600 crore.
The Instadapp matter is separate: the ED alleges about $40 million of FEMA contraventions, with stablecoins sold in Singapore and the money sent to India as what it calls bogus software and consultancy fees.
These are allegations from a search, not findings of a court or an adjudicating authority. As of publication we found no public response from Mudrex.
What the release does not say
Per Crypto Times’ reading of the release, it does not mention arrests, and it does not say any bank account of RPFAS Technologies or Instadapp Labs was frozen. Nor does it allege that customer coins were lost or misused.
That matters because FEMA is a civil law. A FEMA case typically ends with a monetary penalty, which can run up to three times the sum involved where that sum can be quantified. It is a different track from the Prevention of Money Laundering Act, under which the ED can attach assets and arrest people.
BtcMedia comparison: two ways to send money abroad
The ED’s case turns on the gap between the official route and the crypto route. Here is how they compare for an Indian sending money out:
| Bank remittance (LRS) | Stablecoin route described by ED | |
|---|---|---|
| Who authorises it | RBI, through your bank | No RBI authorisation, per ED |
| Annual limit | $250,000 per person per financial year | None enforced |
| Tax at the time of sending | TCS of 20% above ₹10 lakh a year for most purposes, adjustable against your tax | 1% TDS when the USDT is sold, plus 30% tax and cess on any gain |
| Paper trail | Form A2, bank records | Exchange records, but FEMA exposure |
BtcMedia verdict: the crypto route may look faster, but it is the route regulators are now searching premises over. For moving money abroad, the bank remittance is the only one that is clearly legal.
What it means for Indian investors
If you only buy, hold and sell crypto in rupees, nothing in the ED’s release describes your activity. Still, three habits are worth having whatever app you use:
- Download your statements now. A full trade and TDS history makes your ITR filing (Schedule VDA) easy and protects you if an app’s operations are ever disrupted. Our crypto TDS calculator and crypto tax calculator can check the numbers.
- Don’t use crypto apps to pay people abroad. That is the precise activity under investigation, and the USDT you sell is taxed like bitcoin.
- Know who you trade with. Check whether a platform is registered with FIU-IND; we explain the rules on legality and registration here. For long-term holdings, withdrawing to a wallet you control removes platform risk entirely.
You can track the bitcoin price in rupees or the USDT to INR rate on BtcMedia.
How we wrote this: allegations and figures are from the ED’s 29 October 2026 release and X post as reported by Moneycontrol, ETV Bharat/IANS and Crypto Times; tax and LRS rules are India’s current published rules, checked at 10:50 PM IST.
FAQ
Has the ED frozen Mudrex user funds? The ED’s release, as reported, mentions no frozen accounts and no arrests. It describes a search and preliminary findings under FEMA.
Is it illegal to send money abroad using USDT from India? The ED says doing so as a remittance service without RBI authorisation breaches FEMA. The authorised route is a bank remittance under the Liberalised Remittance Scheme.
Is FEMA a criminal case? No. FEMA is civil and leads to penalties. Money-laundering cases run separately under the PMLA.
This article is for information only and is not financial or legal advice.