TLDR
- CoinDCX co-founders detained by authorities in connection with alleged 71 lakh rupee fraud scheme.
- The cryptocurrency platform claims fraudsters impersonated executives using counterfeit websites.
- More than 1,212 fraudulent sites mimicking the exchange were identified since April 2024.
- According to the company, funds were transferred to third-party accounts unconnected to the platform.
- Both executives maintain innocence while assisting authorities with the investigation.
Authorities in India have detained Sumit Gupta and Neeraj Khandelwal, the co-founders of cryptocurrency exchange CoinDCX, in connection with an alleged digital asset fraud investigation, multiple sources confirm. The platform has issued a strong denial of involvement, asserting that criminals exploited their brand identity and impersonated leadership to deceive investors.
The investigation centers on approximately 71 lakh rupees, equivalent to roughly $85,000 in losses. Media outlets indicate the executives were taken into custody following a First Information Report that specifically identified them in the complaint. CoinDCX has countered that the complaint incorrectly identifies the responsible parties and connects the incident to a broader impersonation operation targeting the company.
Authorities detain executives following fraud allegations
According to multiple reports, both Gupta and Khandelwal were apprehended and interrogated this week regarding the alleged fraudulent activity. The case emerged after a victim filed accusations against them related to missing funds. Law enforcement has not yet disclosed comprehensive information about the movement of the disputed money.
CoinDCX stated that the fraudulent transactions did not occur through legitimate channels on its platform. The organization emphasized that victims were instructed to send cash payments to external accounts. The company further clarified that these receiving accounts maintained no connection whatsoever to CoinDCX or its business operations.
🔥 @CoinDCX co-founders arrested in fraud probe#CoinDCX said its co-founders Sumit Gupta and Neeraj Khandelwal were arrested by police as part of an investigation into a fraud case involving impersonation websites.
The case relates to identity misuse, with scammers creating… pic.twitter.com/NHzL1Knmlg
— PHOENIX – Crypto News & Analytics (@pnxgrp) March 22, 2026
The exchange characterized the situation as an unfounded complaint resulting from brand exploitation. According to their statement, criminals established an organized network that replicated CoinDCX’s visual identity and deceived potential investors. The platform asserted that the purported scheme incorrectly implicated the founders in these fraudulent activities.
Exchange reports extensive counterfeit website operation
According to CoinDCX, brand impersonation has emerged as an escalating challenge within India’s digital financial services sector. The company explained that scammers deployed counterfeit websites and fabricated claims to create the appearance of affiliation with the legitimate business. The platform noted that numerous users were deceived into trusting these fraudulent communication channels.
From April 2024 through January 2026, CoinDCX documented and reported over 1,212 fraudulent websites to authorities. These sites were specifically engineered to replicate the appearance of the authentic platform. The organization also indicated it had released multiple public alerts to assist users in confirming the legitimate website address.
In an official communication, the company declared, “CoinDCX is being targeted by fraudsters.” The statement continued, “The entire conspiracy falsely claims that funds were transferred to accounts which have no relation to CoinDCX.” The platform confirmed that both co-founders were fully cooperating with the ongoing investigation.
Investigation highlights cryptocurrency fraud vulnerability in India
CoinDCX ranks among India’s most prominent cryptocurrency trading platforms and reportedly serves more than 2 crore users. The exchange has also secured investment backing from Coinbase Ventures. Due to its market prominence, this case has attracted significant attention throughout India’s cryptocurrency industry.
Sources indicate investigators may now examine digital evidence, financial transaction trails, and the source of the counterfeit websites. It remains uncertain whether any alleged transactions involved official CoinDCX infrastructure. Law enforcement has not yet publicly confirmed this critical detail.
The case resolution will likely hinge on whether investigators can establish a direct connection between the named co-founders and the reported fraudulent activities. Meanwhile, the company maintains its position that no wrongdoing occurred and attributes the case to impersonators exploiting their brand. The police investigation remains ongoing, according to current reports.
