CoinDCX Founders Arrested for Fraud, Blame Identity Theft

• CoinDCX co-founders Sumit Gupta and Neeraj Khandelwal have been arrested by Indian authorities in Bengaluru following allegations of crypto-related fraud.
• The case involves a victim who claims to have lost 71.6 lakh rupees (approximately $85,000) through a scheme promising high returns and franchise rights.
• CoinDCX has denied the allegations, stating that the founders are victims of a brand impersonation conspiracy involving the fake domain coindcx.pro.

Details of the Arrests and Allegations

Thane Police detained the founders of India's largest cryptocurrency exchange following a First Information Report (FIR) filed on March 16. A magistrate's court has remanded Sumit Gupta and Neeraj Khandelwal to police custody until March 23. The investigation centers on allegations of criminal breach of trust brought forward by an insurance consultant from Mumbra.

The complainant alleges that between August 2025 and February 2026, he was defrauded after being lured with promises of lucrative investment returns and the acquisition of franchise rights tied to the CoinDCX brand. A total of six individuals were named in the FIR, including the two co-founders.

CoinDCX Denies Involvement

In a statement released on March 21, CoinDCX strongly rejected the claims, labeling the FIR a "false conspiracy." The company asserts that the fraud was orchestrated by impersonators using a fraudulent website, coindcx.pro, which has no affiliation with the official platform. CoinDCX noted that the complainant never reached out to the exchange directly before taking legal action.

The exchange highlighted the growing threat of cyber fraud in India, reporting that it has identified and flagged more than 1,212 fake websites impersonating its brand between April 1, 2024, and January 5, 2026.

Corporate Standing and Recent Challenges

This legal development follows a period of significant growth and occasional setbacks for the exchange. CoinDCX, founded in 2018 by IIT Bombay alumni, reached a valuation of $2.45 billion after a Coinbase Ventures investment in October 2025.

Key statistics and recent history for the exchange include:

• 20 million registered users and $165 billion in annualized transaction volume.
• India's first crypto unicorn, reaching a $1.1 billion valuation in 2021.
• A $44 million security exploit in July 2025 caused by malware on an employee's laptop, which the company covered using its internal treasury to protect customer assets.

The founders remain in custody as authorities continue to investigate the extent of the alleged fraud and the potential involvement of the named parties.