In a significant development that has shaken India’s cryptocurrency ecosystem, the co-founders of CoinDCX, Sumit Gupta and Neeraj Khandelwal, have reportedly been questioned by the Thane Police over allegations of a crypto investment fraud. The case, which centers around a website impersonating the CoinDCX platform, highlights the growing problem of brand impersonation and cyber fraud in the digital finance sector.
The Allegations and Initial Reports
According to reports from The Economic Times, the founders were arrested by the Thane Police on charges of criminal breach of trust. However, other local media outlets, including Entrackr, have stated that the founders were called for questioning rather than being formally arrested. The allegations stem from a first information report (FIR) filed by a 42-year-old insurance consultant who claims to have lost approximately 71 lakh Indian rupees (about $75,000) after being lured to invest via a fake website posing as CoinDCX.
CoinDCX’s Response
In a statement posted on X, CoinDCX strongly denied the allegations, asserting that the FIR was “false and filed as a conspiracy” by impersonators posing as its founders. The company emphasized that the funds were diverted to third-party accounts with no connection to the exchange. CoinDCX also highlighted the broader issue of brand impersonation and cyber fraud, which it described as significant challenges in India’s digital finance sector.
The Scale of the Problem
The exchange provided additional context by revealing that between April 1, 2024, and January 5, 2026, it had reported more than 1,212 websites impersonating its coindcx.com domain. This statistic underscores the pervasive nature of phishing and impersonation attacks that have increasingly plagued Indian crypto users. CoinDCX has been proactive in reporting these incidents and is working closely with law enforcement to combat these fraudulent activities.
The Broader Context of Online Investment Scams
The CoinDCX case is part of a larger trend of rising online investment scams in India. Data from the Ministry of Home Affairs, cited in Insights IAS, indicates that 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, highlighting the need for enhanced security measures and user education.
CoinDCX’s Security History
Founded in 2018 and based in Mumbai, CoinDCX is one of India’s leading crypto trading platforms, valued at about $2.45 billion after an investment from Coinbase Ventures in October 2025. The exchange has faced security challenges in the past, including a July 2025 breach where attackers stole roughly $44 million from an internal operational account. Despite this, the company maintained that customer assets were not affected and has since taken steps to bolster its security protocols.
Looking Forward
The allegations against CoinDCX’s founders serve as a stark reminder of the vulnerabilities in the crypto space, particularly in emerging markets like India. As the industry continues to grow, it is imperative for exchanges to prioritize user education and security. The case also underscores the need for robust regulatory frameworks to protect investors and maintain the integrity of the market. CoinDCX’s proactive stance in reporting impersonation attempts and cooperating with authorities is a positive step, but more needs to be done to ensure the safety and trust of users in the digital finance ecosystem.
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