The price of USDT on Indian crypto platforms surged to more than 8.5% above its dollar peg after India's Enforcement Directorate raided six premises in Bengaluru on June 17, targeting five crypto payment firms accused of unauthorized cross-border transfers totaling over $265 million using USDT. The raids disrupted the supply chain of dollar-pegged USDT from abroad, causing the premium — which normally sits between 3% and 4% — to roughly double. Market makers and liquidity providers have pulled back from sourcing USDT overseas, tightening domestic liquidity. The ED alleges the firms operated an informal remittance channel, where non-resident Indians used USDT to bypass formal banking routes, converting rupees to stablecoins for faster and cheaper transfers. The premium reflects strong local demand for stablecoins as a hedge against rupee depreciation and for cross-border trade. The crackdown also pressures off-ramp infrastructure, which converts crypto back to local cash. Coinbase recently launched direct rupee rails in India, but the ED's action shows regulatory risks remain high for crypto arbitrage in the country.

Key facts

• USDT premium in India hit 8.5% after ED raids, double the usual 3-4% gap.
• ED searched six Bengaluru premises, accusing firms of $265M unauthorized USDT transfers.
• Market makers halted overseas USDT sourcing, tightening domestic liquidity.
• Firms allegedly ran informal remittance channels using USDT for cross-border flows.
• Coinbase launched rupee rails last month, but off-ramp infrastructure remains pressured.

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