CoinDCX Founders Remanded in ₹71.6 Lakh ($86K) Fraud Case

CoinDCX founders taken into custody

News of the arrest first surfaced through a post by Crypto Aman on X. Authorities later confirmed that Thane Police detained Sumit Gupta and Neeraj Khandelwal in Bengaluru and presented them before a holiday court. The court remanded both to police custody until Monday. (Source: Economic Times)

An insurance advisor filed the complaint, alleging that he lost ₹71.6 lakh after promoters promised him 12 percent monthly returns and franchise opportunities tied to CoinDCX.

Background on CoinDCX

CoinDCX launched in 2018 and quickly became one of India’s largest crypto exchanges. Founded by Sumit Gupta and Neeraj Khandelwal, the platform secured backing from global players including Coinbase.

It positioned itself as a compliant and user-focused exchange in a market often affected by scams and regulatory uncertainty. The founders have also played a visible role in pushing for clearer crypto regulations in India.

Why this matters

The case involves a relatively small amount compared to past crypto incidents, but authorities have changed the narrative by taking two high-profile founders into custody. It signals stricter enforcement by Indian authorities at a time when the industry is still rebuilding trust.

The case also highlights a growing issue. Impersonation networks are increasingly driving crypto scams in India by replicating trusted platforms. This trend creates reputational risks even for established exchanges.

CoinDCX response and impersonation claims

CoinDCX has strongly denied the allegations. The company stated that the case is based on impersonators who used fake websites and falsely claimed association with the exchange.

The exchange also revealed that authorities received reports of more than 1,212 fake websites mimicking coindcx.com between April 2024 and January 2026.(Source: CoinDCX X Statement)

In its official statement, the company said:

“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 reported over 1,212 fake websites impersonating coindcx.com. We are fully cooperating with the relevant law enforcement authorities.”

The exchange also clarified that the complainant did not route any of the funds mentioned in the complaint through its platform.

How the fraud allegedly worked

According to the complaint, the victim interacted with websites that closely resembled CoinDCX branding. The fraudsters allegedly promised high monthly returns and offered franchise-style investment opportunities.

Operators collected payments through bank transfers and cash, after which they disappeared. Police registered the FIR against six individuals, including the founders, under provisions related to cheating and criminal breach of trust.

CoinDCX maintains that the scheme had no connection to its actual operations.

What happens next

The founders will remain in custody until the next hearing, expected on Monday. Authorities are investigating the individuals named in the FIR while examining evidence related to the impersonation network.

CoinDCX continues to cooperate with law enforcement and has issued public warnings to users about fake websites. The exchange stated that customer funds and platform operations remain unaffected.

Broader implications for crypto in India

This case could influence how authorities handle similar complaints going forward. If authorities validate the impersonation claim, regulators and exchanges may take stronger action against clone websites.

If new evidence emerges, it could create wider reputational damage for the sector. For now, the situation remains fluid, and the outcome will depend on the findings of the ongoing investigation.