CoinDCX Founders Questioned in India Over Alleged Fraud Case

• Sumit Gupta and Neeraj Khandelwal, the co-founders of Indian exchange CoinDCX, are under investigation by the Thane Police regarding a crypto investment fraud case.
• The allegations stem from a victim losing approximately 71 lakh Indian rupees ($75,000) through a fraudulent website that impersonated the official CoinDCX platform.
• CoinDCX has denied the charges, claiming the founders are targets of a conspiracy and highlighting that they have reported over 1,212 impersonation websites in recent years.

Investigation and Fraud Allegations

The co-founders of the prominent Indian cryptocurrency exchange CoinDCX, Sumit Gupta and Neeraj Khandelwal, have been drawn into a legal dispute following a police complaint in Thane, India. While some local reports suggested the pair were arrested for criminal breach of trust, others indicated they were summoned for questioning. The case was initiated after a 42-year-old insurance consultant reported a loss of 71 lakh Indian rupees after being misled into investing through a fake website designed to look like the legitimate CoinDCX interface.

CoinDCX Defense and the Impersonation Crisis

In response to the First Information Report (FIR), CoinDCX issued a statement characterizing the allegations as a conspiracy. The company clarified that the victim's funds were diverted to third-party accounts that have no affiliation with the exchange. According to the firm, this incident is part of a massive brand impersonation problem. Between April 1, 2024, and January 5, 2026, CoinDCX identified and reported more than 1,212 domains that were illegally using its brand to facilitate phishing and cyber fraud.

Broader Market Risks and Security History

The incident reflects a significant rise in digital finance crimes in India, where investment scams accounted for 76% of all financial losses in 2025. On a global scale, the Web3 sector saw losses of roughly $3.95 billion due to exploits and hacks in the same year. CoinDCX, which was valued at $2.45 billion following an investment from Coinbase Ventures in October 2025, is no stranger to security challenges. In July 2025, the exchange suffered a $44 million breach of an internal account, though the company maintained that customer assets were never compromised.