The co-founders of Indian cryptocurrency exchange CoinDCX, Sumit Gupta and Neeraj Khandelwal, were arrested Saturday following a police investigation into allegations of fraud, according to reports. The arrests come as the company contends with a surge in impersonation scams targeting its users and damaging its reputation.
The first information report (FIR) was filed at a Mumbai police station after an individual alleged being defrauded of ₹71 lakh (approximately $85,000 USD as of March 22, 2026) in a cryptocurrency scam, The Economic Times reported. CoinDCX maintains its innocence and attributes the fraud to impersonators.
CoinDCX has publicly stated that the FIR is “false” and the result of a deliberate effort to harm the company’s reputation. The exchange claims fraudsters are creating fake websites and posing as its founders to deceive investors. “The entire conspiracy falsely claims that funds were transferred in cash to third party accounts which have no relation to CoinDCX,” the company said in a statement on X (formerly Twitter).
The company reports a significant increase in impersonation attempts, identifying more than 1,212 fake websites mimicking its platform between April 1, 2024, and January 5, 2026. CoinDCX has issued public advisories to warn users about these scams and is cooperating with law enforcement. Moneycontrol.com details the company’s efforts to combat these fraudulent sites.
This incident follows a significant cybersecurity breach in 2025, where hackers stole assets worth $44 million from CoinDCX’s internal operational account. The company stated at the time that user funds were not affected and that it was strengthening its security measures. Entrackr reported on the questioning of the founders in relation to the impersonation case.
Founded in 2018, CoinDCX has become a prominent player in India’s rapidly growing cryptocurrency market. The arrests of its co-founders raise concerns about the regulatory landscape and security challenges facing the industry. The ongoing investigation will likely shed light on the extent of the alleged fraud and the measures CoinDCX had in place to protect its users.
It remains to be seen how these legal proceedings will impact CoinDCX’s operations and its standing within the Indian cryptocurrency ecosystem. Authorities will continue to investigate the allegations, and the company has pledged its full cooperation. The case underscores the increasing need for robust security measures and investor education in the digital asset space.
Disclaimer: This article provides information for general knowledge and informational purposes only, and does not constitute financial or legal advice.
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