CoinDCX founders Sumit Gupta and Neeraj Khandelwal were arrested by Thane Police in connection with an alleged cryptocurrency fraud involving Rs 7.16 million. Multiple reports said the two were detained in Bengaluru on Saturday and later produced before a court in Thane, which sent them to police custody until Monday, March 23, 2026. With that custody period ending, they were expected to be released on Monday.
Complaint alleges promised returns of 12% a month
According to the FIR, a 41-year-old insurance advisor accused the two founders of cheating him out of Rs 7.16 million, or about $76.3K, between August 2025 and February 2026. The complaint said he was promised monthly returns of around 12% and offered a franchise opportunity said to be linked to CoinDCX.
Police said the complainant transferred money through both cash payments and bank transactions. The promised returns did not arrive, the franchise did not materialize, and the accused allegedly stopped responding. The case was registered at Mumbra police station under provisions of the Bharatiya Nyaya Sanhita covering cheating and criminal breach of trust. In total, six people have been named, and the investigation remains open.
Exchange says FIR is false and tied to impersonation scam
CoinDCX pushed back strongly against the allegations. The exchange said the FIR is “false” and described the matter as part of a wider impersonation scheme in which fraudsters pretended to be the founders and used a fake platform to mislead investors.
The company also said the funds mentioned in the complaint were sent to third-party accounts with no connection to the official exchange. CoinDCX added that it is cooperating with authorities and continues warning users about the rise in crypto-related fraud.
Key link between founders and money trail remains unclear
At this stage, the case rests on two competing versions. Police are pursuing the complaint, while CoinDCX argues that the alleged fraud happened outside its official channels. The source material says there is still no public proof directly tying the founders to the transfers, and it is not yet confirmed whether the complainant dealt with official CoinDCX channels or fake ones.
CoinDCX said that 1,212 fake websites imitating its platform were reported between April 2024 and January 2026. The full money trail has not been disclosed publicly, including who ultimately received the funds. Based on the information available so far, no direct operational link between the exchange and the alleged fraud has been confirmed.
Case puts focus back on India’s crypto fraud problem
The report frames the arrests as part of a wider pattern in India’s crypto market, where fraud cases continue to surface while investor-protection rules remain limited. Existing measures such as tax rules and PMLA-related compliance address oversight, but the source argues they do less to shield retail users from scams built around fake platforms and fixed-return promises.
Until investigators publish more on the transactions and the parties involved, the central dispute in the case remains unresolved. CoinDCX has said its operations are unaffected and that it will keep focusing on user safety and compliance.