Coinbase-backed CoinDCX founders questioned in fraud case: Report

Indian crypto exchange CoinDCX co-founders Sumit Gupta and Neeraj Khandelwal have reportedly been arrested in India following a police complaint alleging their involvement in a crypto investment fraud.

The Economic Times reported Saturday that the pair were arrested by the Thane Police on allegations of criminal breach of trust, citing local officials. Other local media, including Entrackr, reported that the founders had been called for questioning rather than arrested.

The case reportedly centers on a website that allegedly posed as the CoinDCX platform and stemmed from a first information report (FIR) filed by a 42-year-old insurance consultant who claimed to have lost about 71 lakh Indian rupees (roughly $75,000) after being lured to invest via the fake site, according to an earlier report by the Times of India.

In a statement on X, CoinDCX said the FIR was “false and filed as a conspiracy” by impersonators posing as its founders and diverting funds to third-party accounts that it said had no connection to the exchange.

CoinDCX denies the allegations. Source: CoinDCX

The company described brand impersonation and cyber fraud as growing problems in India’s digital finance sector and stressed that it was “fully cooperating with the relevant law enforcement authorities,” while remaining focused on user education and awareness.

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CoinDCX added that between April 1, 2024, and Jan. 5, 2026, it had reported more than 1,212 websites impersonating its coindcx.com domain, highlighting the scale of phishing and impersonation attacks that have increasingly plagued Indian crypto users. 

Investment scams and Web3 losses

The case comes amid a broader rise in online investment scams in India. According to data from the Ministry of Home Affairs cited in Insights IAS, investment scams accounted for 76% of all financial losses in 2025. Globally, Web3 platforms lost around $3.95 billion to hacks and exploits in 2025.

Founded in 2018 and based in Mumbai, CoinDCX is one of India’s best-known crypto trading platforms and was valued at about $2.45 billion after an investment from Coinbase Ventures in October 2025.

The exchange has also faced questions over security after a July 2025 breach in which attackers stole roughly $44 million from an internal operational account, an incident that made CoinDCX one of that month’s largest hacking victims by losses, though the company said customer assets were not affected.

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