Indian crypto exchange CoinDCX has denied any connection to an alleged cryptocurrency-related fraud case after its co-founders, Sumit Gupta and Neeraj Khandelwal, were named in a police investigation. The case has drawn significant attention in India’s digital asset sector, not only because of the company’s prominence, but also because reports have differed on whether the two executives were formally arrested or simply summoned for questioning.
According to reports cited in the source material, authorities in Thane, part of the Mumbai metropolitan region, registered a First Information Report (FIR) on March 16. The FIR alleges cheating and criminal breach of trust tied to an investment scheme involving ₹71.6 lakh, or roughly $85,000. The complaint was reportedly filed in connection with an alleged fraud that promised unusually high returns and invoked CoinDCX’s brand in order to gain investor trust.
The complainant is described as a 42-year-old insurance advisor from Mumbra, who, along with two associates, says he was lured into the scheme between August 2025 and early 2026. The alleged operation reportedly promised monthly returns of 10% to 12% and even presented what were described as franchise-style opportunities linked to CoinDCX. Funds were allegedly transferred through both cash payments and bank transactions, but were never returned, according to the FIR.
Conflicting reports over founders’ legal status
Indian media coverage has not been entirely consistent on the procedural status of CoinDCX’s co-founders. Some outlets reported that the pair were detained in Bengaluru and presented before a court, while other reports suggested they were only called in for questioning and had not been formally arrested. As presented in the source, this uncertainty remains unresolved in public reporting.
Police reportedly named six individuals in the case, including Gupta and Khandelwal. However, a critical point in the available information is that investigators have not publicly established a direct operational connection between the alleged fraud and CoinDCX’s official exchange platform or infrastructure. Reports indicate that the money in question was routed to third-party accounts unrelated to CoinDCX, rather than to company-controlled wallets or official business channels.
That distinction is central to how the case is being understood by observers. At this stage, the investigation appears to focus on whether the company’s brand was misused by outside actors, rather than on evidence showing that CoinDCX itself ran or facilitated the alleged scheme through its official systems.
CoinDCX says the FIR is false and blames impersonators
CoinDCX has responded forcefully, rejecting any suggestion that it participated in or benefited from the alleged fraud. In a public statement, the company described the FIR against its co-founders as “false” and said the matter arose from a conspiracy involving impersonators who posed as CoinDCX founders and executives.
The company said scammers created fake websites designed to resemble the official CoinDCX platform and used those websites to deceive investors. In its public comments, CoinDCX argued that the case reflects a broader pattern of fraud in which bad actors exploit the reputations of established digital asset firms to attract victims seeking outsized returns.
In a statement published on X, the exchange 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.” The company added that it had already issued public notices warning users that CoinDCX was being targeted by fraudsters. It further emphasized that the alleged conspiracy involved cash transfers to third-party accounts that had “no relation to CoinDCX.”
CoinDCX also sought to reassure customers and the market that the incident did not compromise the exchange itself. According to the company, no user funds, trading activity, or platform security were affected by the alleged fraud.
More than 1,200 fraudulent domains reported
To support its argument that the case is rooted in impersonation rather than internal misconduct, CoinDCX disclosed that it has been tracking a significant number of fraudulent domains pretending to represent its business. The exchange said that between April 2024 and January 2026, it identified and reported more than 1,212 fake domains impersonating its website.
This figure illustrates the scale of the challenge facing large crypto platforms in emerging digital finance markets. As exchanges become more recognizable to mainstream retail users, their brands can also become useful tools for scammers who create cloned sites, fake social media profiles, and unauthorized investment offers. In many cases, victims may not be sophisticated enough to distinguish an official platform from a convincing imitation.
CoinDCX said it is fully cooperating with law enforcement as the case proceeds. That cooperation may prove important as investigators attempt to separate the use of the company’s name from any direct legal responsibility of the exchange or its executives.
A wider warning for India’s digital asset market
As of March 22, the investigation was still ongoing, with authorities reportedly reviewing the roles of all named individuals. Based on the source material, the case had not yet produced a publicly established link between the alleged fraud and CoinDCX’s official operating infrastructure. Even so, the inclusion of the co-founders’ names in the FIR has made the issue highly visible and raised questions about how quickly reputational damage can spread in the absence of clear procedural facts.
More broadly, the case highlights an ongoing vulnerability in India’s digital finance ecosystem: brand impersonation combined with promises of high returns. Those two elements have repeatedly appeared in schemes targeting retail participants, especially in fast-growing sectors such as crypto, where technical complexity and regulatory uncertainty can make fraud easier to disguise.
The reported promise of 10% to 12% monthly returns is itself a common red flag in investment scams. In crypto markets, such claims often rely on urgency, exclusivity, and borrowed legitimacy from known brands. By attaching an offer to a recognizable exchange and framing it as a franchise or partnership opportunity, scammers can create the appearance of credibility even when the payment rails and websites involved are entirely unofficial.
For regulators, exchanges, and users alike, the CoinDCX case underscores the importance of basic verification practices: checking official domains, confirming communication channels, and treating extraordinary return promises with caution. For the company, the immediate challenge is legal and reputational—demonstrating that its brand was abused without its participation. For authorities, the challenge is to identify the individuals behind the alleged scheme and clarify whether those named in the FIR were victims of impersonation, persons of interest, or participants with a more direct role.
Until the investigation develops further, the most important facts remain limited but clear: an FIR has been filed, CoinDCX’s co-founders were named in that filing, the company denies any operational involvement, and the disputed funds were reportedly sent to accounts unrelated to the exchange. The outcome of the case could shape how Indian authorities and crypto firms respond to future incidents involving fake websites, executive impersonation, and investor deception.