India Police Arrest CoinDCX Founder, Platform Claims FIR Led by Impostor

The co-founders of CoinDCX, India’s largest cryptocurrency exchange, Sumit Gupta and Neeraj Khandelwal, were arrested by Indian police on Friday in Bangalore on charges of cryptocurrency investment fraud and were taken to the weekend magistrate’s court. CoinDCX denies all allegations, claiming that the fraud was carried out through fake websites impersonating their brand and has no connection to the official platform.

Case Origin: Insurance Advisor’s 7.16 Million Rupees Complaint

The arrest stems from an FIR filed on March 16 by a 42-year-old insurance advisor residing in Thane, a suburb of Mumbai. According to the complaint, between August 2025 and February 2026, the complainant was defrauded under the guise of “CoinDCX-related high returns and franchise opportunities,” resulting in a loss of approximately 7.16 million rupees (about $85,000). The FIR lists six suspects, including the two founders and four others, with charges of criminal breach of trust.

Sources familiar with the matter told Indian business media Moneycontrol that the scam was conducted via a counterfeit website named coindcx.pro, which has no connection to the official platform coindcx.com. Additionally, the complainant had never directly contacted CoinDCX before filing the FIR. The two founders were caught off guard by these sudden allegations.

CoinDCX’s Response: 1,212 Fake Websites and Brand Protection Records

CoinDCX issued a statement on X (formerly Twitter), claiming the FIR is “false and part of a conspiracy led by impersonators pretending to be CoinDCX founders.” The company stated that the fraud was carried out through counterfeit domains rather than the official platform and provided specific records of their efforts to combat such scams:

Main Defense Points of the CoinDCX Platform

Scale of Fake Websites: Between April 2024 and January 2026, over 1,212 counterfeit domains impersonating coindcx.com have been reported to relevant authorities.

No Direct Contact by the Complainant: The complainant had never contacted CoinDCX through official channels before filing the FIR.

Unauthorized Websites Involved: The scam operated via unapproved counterfeit domains like coindcx.pro, which have no affiliation with the official platform.

Proactive Law Enforcement Cooperation: The company stated it would fully cooperate with authorities investigating brand impersonation and related online fraud.

A Year of Turmoil: Hacks, Coinbase Investment, and Multiple Police Incidents

This arrest marks the second major police action against CoinDCX within less than a year. In July 2025, Bangalore police arrested software engineer Rahul Agarwal, whose account information was used to steal approximately $44 million from the company’s internal operational wallets. Hackers allegedly used fake recruitment information to trick him into installing malicious software. CoinDCX claims to have recovered the losses from its vaults, and customer assets remain unaffected.

On the corporate development front, CoinDCX announced in October 2025 that it had received investment from Coinbase Ventures, valuing the company at $2.45 billion. The Competition Commission of India approved this minority stake acquisition in December 2025. Founded in 2018 by Gupta and Khandelwal, both alumni of IIT Bombay, CoinDCX now has over 20 million users, with an annual trading volume of $165 billion, making it India’s first cryptocurrency unicorn.

Frequently Asked Questions

Q: Why were the CoinDCX founders arrested?
A: Based on the FIR filed on March 16, Bangalore police investigated the two individuals for involvement in a cryptocurrency investment scam claiming a loss of 7.16 million rupees. After questioning on Friday in Bangalore, they were formally arrested and are currently detained until March 23.

Q: What is CoinDCX’s official stance?
A: CoinDCX claims the FIR was orchestrated by impersonators pretending to be the founders. The scam involved counterfeit domain coindcx.pro and has no connection to the official platform. The company has reported over 1,212 counterfeit domains in the past two years and stated it will cooperate with investigations.

Q: Is this the first time CoinDCX has been involved in police investigations?
A: No. In July 2025, a CoinDCX software engineer was arrested by Bangalore police for allegedly helping to steal $44 million. The recent arrest of the founders is the second police-related incident within less than a year.