CoinDCX Rebuffs Fraud Allegations After Founders Arrested by Indian Police
Indian police have arrested the co-founders of CoinDCX, the country’s largest cryptocurrency exchange, over fraud allegations. Sumit Gupta and Neeraj Khandelwal were arraigned Saturday before a weekend magistrate’s court. The judge remanded both executives to police custody until Monday pending further investigation by local authorities .
What Allegations Led to the Arrests?
The arrests by Thane police stem from a First Information Report (FIR) filed by an insurance advisor. The complainant alleges that six individuals defrauded them of approximately $85,000 (7.16 million rupees) through a fake crypto investment scheme .
According to the police report, the victim was lured with promises of exorbitant returns on investments slated to mature between August 2025 and February 2026. Instead, the accused allegedly siphoned the funds without delivering the promised returns or the franchise rights .
CoinDCX’s Swift Response
CoinDCX swiftly rebuffed the allegations, characterizing the arrests as a misunderstanding fueled by a sophisticated brand impersonation campaign. The exchange stated that fraudsters posed as the co-founders to deceive the public. Moreover, all the stolen funds were transferred to third-party bank accounts with no ties to CoinDCX or its executives .
The FIR filed against our co-founders is false and filed as a conspiracy against CoinDCX by impersonators posing as Founders of CoinDCX and cheating the public at large. We have taken cognizance of the fact and published a notice to public at large on our website that CoinDCX is…
— CoinDCX : India Ka Crypto Coach (@CoinDCX) March 21, 2026
“We have taken cognizance of the fact and published a notice to public at large on our website that CoinDCX is being targeted by fraudsters,” the firm added on X .
The Scale of Impersonation
To underscore the scale of the issue, CoinDCX disclosed that it had reported more than 1,200 fake domain names and impersonation websites to cyber authorities between April 2024 and January 2026 .
While these figures could not be independently verified, they highlight a systemic vulnerability in the digital asset sector. Major crypto firms globally have repeatedly warned retail investors about the proliferation of phishing links, fake customer support accounts, and AI-generated deepfakes .
Legal Entanglement Amid Ongoing Challenges
The legal entanglement arrives during a complex period for CoinDCX. While the platform remains a dominant force in India’s crypto market, it is still navigating the reputational aftermath of a $44.2 million cyberattack in July 2025 .
Notably, following that security breach, the exchange secured a significant investment round in 2025 from industry heavyweight Coinbase. This backing underscored institutional confidence despite the platform’s operational headwinds .
What Happens Next?
The executives remain in police custody until Monday, when the court will hear further arguments. The investigation is ongoing, with local authorities examining the connections between the impersonators and the CoinDCX co-founders. The exchange has maintained that the fraudulent scheme was conducted by third parties with no affiliation to the company .
The case highlights the growing challenge of brand impersonation in the crypto industry, where fraudsters increasingly leverage the names of legitimate exchanges to deceive investors. As the investigation unfolds, the outcome will likely have significant implications for both CoinDCX and the broader Indian crypto ecosystem .
Sources: CoinDCX, Thane Police, Indian Court Records, Coin Newsweek.
Disclaimer: This content is for market information purposes only and is not investment advice. The allegations against CoinDCX executives remain under investigation, and all parties are presumed innocent until proven guilty.
