CoinDCX Co-Founders Reportedly Arrested in India Amidst Crypto Investment Fraud Allegations

Indian cryptocurrency exchange CoinDCX co-founders Sumit Gupta and Neeraj Khandelwal have reportedly been arrested in India following a police complaint alleging their involvement in a sophisticated crypto investment fraud scheme. The Economic Times reported on Saturday that the duo was apprehended by the Thane Police on charges of criminal breach of trust, citing information from local officials. However, conflicting reports emerged from other local media outlets, including Entrackr, which indicated that the founders had been summoned for questioning rather than arrested.

The investigation reportedly stems from a first information report (FIR) filed by a 42-year-old insurance consultant who claimed to have lost approximately 71 lakh Indian rupees, equivalent to roughly $75,000 USD. The complainant alleges that they were lured into investing through a fraudulent website that mimicked the official CoinDCX platform. An earlier report by the Times of India detailed the consultant’s claims of financial loss attributed to this alleged impersonation.

In response to the unfolding situation, CoinDCX issued a statement on the social media platform X, vehemently denying the allegations. The company asserted that the FIR was "false and filed as a conspiracy" by individuals impersonating its founders. CoinDCX further stated that funds were diverted to third-party accounts that had no affiliation with the exchange. The cryptocurrency platform characterized brand impersonation and cyber fraud as escalating challenges within India’s burgeoning digital finance sector. They emphasized their full cooperation with law enforcement authorities while reaffirming their commitment to user education and awareness initiatives.

CoinDCX also highlighted the significant scale of impersonation and phishing attacks targeting Indian crypto users. The company reported that between April 1, 2024, and January 5, 2026, it had flagged over 1,212 websites that were impersonating its official coindcx.com domain. This figure underscores the pervasive nature of such fraudulent activities.

The reported arrests and allegations against CoinDCX co-founders come at a time when online investment scams are on the rise across India. Data from the Ministry of Home Affairs, as cited by Insights IAS, indicates that investment scams constituted a substantial 76% of all financial losses incurred in 2025. On a global scale, the Web3 sector has also been a significant target, with platforms losing approximately $3.95 billion to hacks and exploits throughout 2025, according to reports.

Founded in 2018 and headquartered in Mumbai, CoinDCX is recognized as one of India’s prominent cryptocurrency trading platforms. The exchange achieved a valuation of approximately $2.45 billion following an investment from Coinbase Ventures in October 2025.

This development also brings to light past security concerns surrounding the exchange. In July 2025, CoinDCX experienced a security breach where attackers managed to steal roughly $44 million from an internal operational account. This incident positioned CoinDCX among the most significant victims of crypto theft that month by value of losses. At the time of that breach, the company clarified that customer assets remained unaffected.

The ongoing investigation into the alleged crypto investment fraud involving CoinDCX’s co-founders underscores the evolving landscape of digital asset regulation and the persistent threat of cybercrime in the rapidly expanding cryptocurrency market. The company’s stance and the ongoing cooperation with authorities will be crucial in clarifying the facts of the case. The situation also serves as a stark reminder for investors to exercise extreme caution and conduct thorough due diligence before engaging in any cryptocurrency investments, particularly through platforms or websites that may not be officially verified. The prevalence of impersonation scams, as highlighted by CoinDCX, necessitates heightened vigilance among users to protect themselves from financial losses.