CoinDCX Co-Founders Face Police Interrogation Over Alleged Crypto Fraud Scheme
Crypto platform CoinDCX claims the fraud allegations resulting in founder questioning are connected to an extensive brand impersonation operation, pointing to over 1,200 fraudulent websites exploiting its identity.
Co-founders of Indian cryptocurrency trading platform CoinDCX, Sumit Gupta and Neeraj Khandelwal, have allegedly been taken into custody in India after a police complaint was filed accusing them of participating in a cryptocurrency investment fraud scheme.
According to a Saturday report from the Economic Times, the two individuals were detained by Thane Police based on accusations of criminal breach of trust, as confirmed by local law enforcement officials. Meanwhile, alternative local news sources, such as Entrackr, indicated that the co-founders were summoned for questioning instead of being formally arrested.
The legal matter allegedly revolves around a fraudulent website that purportedly imitated the legitimate CoinDCX platform and originated from a first information report (FIR) submitted by a 42-year-old professional insurance consultant who alleged losing approximately 71 lakh Indian rupees (around $75,000) after being deceived into investing through the counterfeit website, based on a previous Times of India report.
Through a public statement posted on X, CoinDCX asserted that the FIR was "false and filed as a conspiracy" orchestrated by fraudsters impersonating its co-founders and redirecting investor funds to external third-party accounts that the exchange maintains have no association with its operations.
The cryptocurrency exchange characterized brand impersonation and digital fraud as escalating challenges within India's digital financial ecosystem and emphasized that it was "fully cooperating with the relevant law enforcement authorities," while maintaining its commitment to educating users and raising awareness.
CoinDCX further disclosed that during the period spanning from April 1, 2024, through Jan. 5, 2026, the company had flagged over 1,212 fraudulent websites that were impersonating its official coindcx.com domain, underscoring the magnitude of phishing campaigns and impersonation threats that have become increasingly prevalent among Indian cryptocurrency investors.
Investment scams and Web3 losses
This incident emerges against the backdrop of a widespread increase in digital investment fraud schemes throughout India. Based on statistics from the Ministry of Home Affairs referenced in Insights IAS, investment-related scams were responsible for 76% of all financial losses recorded in 2025. On a worldwide scale, Web3 platforms experienced approximately $3.95 billion in losses due to security breaches and exploits throughout 2025.
Established in 2018 with headquarters in Mumbai, CoinDCX ranks among India's most prominent cryptocurrency exchange platforms and received a valuation of approximately $2.45 billion following a capital injection from Coinbase Ventures in October 2025.
The trading platform has additionally encountered scrutiny regarding its security infrastructure following a July 2025 security breach during which cybercriminals successfully extracted approximately $44 million from an internal operational account, a security incident that positioned CoinDCX as one of that particular month's most significant hacking casualties measured by financial losses, although the company maintained that customer assets remained uncompromised.