Mudrex says operations normal after ED searches in Rs 5,000 crore FEMA probe

In short

• India's Enforcement Directorate searched three Bengaluru premises and one in Madhya Pradesh on 27 October under FEMA over alleged cross-border crypto transfers exceeding Rs 5,000 crore.
• Mudrex acknowledged the search on 30 October and said deposits, trading and withdrawals continue normally with user funds secure.
• The ED's post exposed shell entities in tax havens and large over-the-counter deals, while coverage names Mudrex, Saber.money and Instadapp.
• Mudrex is FIU-IND registered, but FIU registration is not Reserve Bank of India permission for outbound foreign exchange, replies point out.

The Enforcement Directorate searched three premises in Bengaluru and one in Madhya Pradesh on 27 October 2026 under the Foreign Exchange Management Act (FEMA), over alleged unauthorised cross-border cryptocurrency transfers of more than Rs 5,000 crore (about $527m), according to a post on X from the agency seen by InvestIn.News. The ED said the probe exposed "use of shell entities in tax haven countries, massive OTC deals and illegal foreign payouts via platforms like Binance and Bybit in violation of FEMA provisions". Mudrex, the crypto investing platform, has become a focus of the case through its stablecoin payments venture Saber.money.

What is Mudrex and what does the ED allege?

Mudrex, operated by RPAS Technologies, runs a crypto investment and trading platform in India, and its Saber.money unit describes itself as stablecoin-powered cross-border payment infrastructure for Asia. According to Crypto Watch Desk, the Enforcement Directorate alleges the companies used stablecoins such as USDT and USDC to move money abroad without Reserve Bank of India authorisation. Crypto Watch Desk put the unauthorised transfers and crypto balances on foreign platforms above Rs 4,600 crore, while the agency's own post on X put the case at more than Rs 5,000 crore. No charge or finding has been announced so far.

How the alleged stablecoin route worked

WEEX reported that the Enforcement Directorate's preliminary investigation found the entities allegedly set up shell companies in overseas tax havens to bypass remittance channels authorised by the Reserve Bank of India. They then used stablecoins, mainly USDT and USDC, with large over-the-counter deals, trading on foreign exchanges such as Binance, Bybit and Huobi to move funds abroad. Phemex reported the searches targeted suspected shell companies operating in tax havens linked to large OTC transactions. WEEX put the amount allegedly linked to Instadapp-related entities at about $40m.

What Mudrex said after the search

Mudrex said on X on 30 October that it acknowledged the Enforcement Directorate's statement about a search at its premises on 27 October under FEMA. The company said deposits, trading and withdrawals were functioning as usual, user funds were secure, and it had cooperated with officials. Mudrex also said it is registered with India's Financial Intelligence Unit, FIU-IND, and has followed know-your-customer and anti-money-laundering checks since it began operating in India in 2018. FIU registration, however, covers reporting suspicious transactions, not Reserve Bank of India permission for outbound foreign exchange, a point made in several replies to the posts.

What the FEMA case means for Indian users

For ordinary Indian crypto users, the key point is that Mudrex says trading and withdrawals continue normally, but the Enforcement Directorate's allegations are not findings. Users of Mudrex, Saber.money or Instadapp-linked services can check their accounts and any cross-border stablecoin transfers they made. The main legal question is whether stablecoin transfers that moved rupees offshore without Reserve Bank of India authorisation count as unauthorised foreign exchange, not whether holding crypto is banned.

How Indian traders reacted on X

On X, Keshav Maheshwari said the line most people may skip is that FIU registration is not RBI permission, because one covers reporting suspicious users and the other covers money leaving India. He added that every USDT hop is on a public chain, but the blind spot is the OTC desk abroad. Anita Gopinath said the agency chased Rs 5,000 crore in crypto because banks charge a 3% markup and hold 20% tax collected at source for a year. Others argued that stablecoins should be regulated properly rather than met with raids, while some defended Mudrex for being FIU-registered.

Timeline

• 27 Oct 2026: ED searches three Bengaluru and one Madhya Pradesh premises under FEMA
• 29 Oct 2026: ED posts on X that the probe exposed shell entities and over Rs 5,000 crore in transfers
• 30 Oct 2026: Mudrex says operations are normal, user funds secure, and it cooperated with officials

Questions readers ask

Is Mudrex still operating normally for Indian users after the Enforcement Directorate search?

Mudrex said on X on 30 October that deposits, trading and withdrawals are functioning as usual and user funds are secure. It acknowledged the Enforcement Directorate's search at its premises on 27 October under FEMA, but no charge or finding has been announced.

What is the difference between FIU-IND registration and RBI permission in the Mudrex case?

FIU-IND registration covers reporting suspicious transactions and anti-money-laundering checks. It does not act as Reserve Bank of India permission to move rupees abroad. The Enforcement Directorate's probe centres on whether stablecoin transfers bypassed authorised remittance channels.

What should Indian Mudrex users check after the Enforcement Directorate search?

Users of Mudrex, Saber.money or Instadapp-linked services can check their accounts and any cross-border stablecoin transfers they made. Mudrex says operations are normal, but the legal question is whether those transfers had Reserve Bank of India authorisation.

Our view

At InvestIn.News, we think this case is less a crypto ban and more a test of where stablecoin remittances sit in India's foreign-exchange rules. The Enforcement Directorate's FEMA probe is asking whether rupee-to-stablecoin rails that move money offshore without Reserve Bank of India authorisation count as unauthorised foreign exchange, not whether holding Bitcoin or ether is illegal.

Mudrex's response matters for users because it says the platform is registered with India's Financial Intelligence Unit and still operating normally. But FIU reporting duties do not by themselves grant Reserve Bank of India permission to move rupees abroad. That distinction, raised in public replies, is the legal heart of the case.

We will treat Binance and Bybit as alleged payout channels the ED named, not as accused parties unless the agency says otherwise. The concrete development that would sharpen the view is whether the ED or the Reserve Bank of India issues a formal finding on whether stablecoin remittances require specific FEMA authorisation.

How we reported this: this story draws on reporting by ED (@dir_ed) on X, Crypto Watch Desk, Phemex and WEEX, 8 public posts shown in the story and first-hand reporting by our writer. Each source is linked in the text and listed under Sources.

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Jayshree Majumdar