- CoinDCX co-founders are under police investigation following a complaint linked to a fake website posing as the exchange.
- The case comes amid rising crypto investment scams and follows earlier security concerns, including a 2025 breach at CoinDCX.
Indian cryptocurrency exchange coindcx is facing renewed scrutiny after reports that its co-founders, Sumit Gupta and Neeraj Khandelwal, became embroiled in a police investigation linked to an alleged investment fraud. The case, centered on claims of a criminal breach of trust tied to a fake website mimicking the platform, has unfolded against a backdrop of rising digital scams and mounting security concerns across India’s crypto sector.
Allegations of Fraud and Conflicting Reports on Co-founders
According to a report from The Economic Times, Thane Police in Maharashtra have taken action against CoinDCX co-founders Gupta and Khandelwal following a complaint accusing them of involvement in a crypto investment fraud. The report, citing local officials, stated that the two had been arrested on allegations of criminal breach of trust. However, other local outlets, including Entrackr, described the situation differently, indicating that the founders had been summoned for questioning rather than formally arrested, underscoring uncertainty around the exact legal status of the pair.
The complaint stems from a first information report lodged by a 42-year-old insurance consultant, who claimed to have lost about 71 lakh Indian rupees, or roughly $75,000. The complainant alleged that they were persuaded to invest through a website that appeared to be the official CoinDCX platform but was later identified as fraudulent. The site is said to have impersonated the exchange, drawing the victim into what authorities are now examining as a possible investment scam. This FIR became the basis for the current police action, bringing the exchange’s leadership under official scrutiny.
CoinDCX Response and Rising Brand Impersonation
In a statement posted on X, CoinDCX rejected the allegations set out in the FIR, describing it as false and alleging that it was the result of a conspiracy carried out by impersonators. The company said these unidentified actors posed as its founders and diverted investor funds to third-party bank accounts that it maintained were not connected to the exchange. CoinDCX emphasized that, in its view, the fraud originated from external criminals using its brand and the names of its senior leaders without authorization.
The exchange framed the incident within a larger pattern of brand abuse and cybercrime. It pointed to a sustained surge in phishing and impersonation attempts that target crypto users in India, especially those unfamiliar with the technical details of trading platforms. CoinDCX stated that it is cooperating fully with law enforcement agencies as they investigate and that it continues to focus on user education and awareness campaigns to mitigate such risks. To illustrate the scale of the problem, the company reported that between April 1, 2024, and Jan. 5, 2026, it had identified and reported more than 1,212 websites that attempted to impersonate its official coindcx.com domain. These figures highlight how often criminals allegedly deploy spoofed websites to mislead investors and siphon funds.
Broader Context: Scams, Web3 Losses, and CoinDCX’s Track Record
The dispute involving CoinDCX arrives at a time when investment frauds are consuming a large share of financial losses in India’s digital economy. Data from the Ministry of Home Affairs, cited in Insights IAS, indicated that investment scams accounted for 76% of all financial losses in 2025. The issue is not confined to India. Globally, Web3 platforms collectively lost about $3.95 billion to hacks and exploits in 2025, underscoring the vulnerability of decentralized finance and related services to both technical and social engineering attacks.
CoinDCX itself has grown into one of India’s most recognized cryptocurrency exchanges since its founding in 2018. Based in Mumbai, the platform gained significant visibility and backing, including an investment from Coinbase Ventures in October 2025 that pushed its valuation to around $2.45 billion. Alongside rapid growth, the company has faced its own operational challenges. In July 2025, attackers compromised an internal operational account and extracted approximately $44 million, placing CoinDCX among that month’s largest hacking victims in terms of losses. The exchange said at the time that customer assets were not impacted by the breach, but the incident added to broader questions about security practices in the crypto trading sector.
Conclusion
The case involving the alleged fraud linked to a fake CoinDCX website, and the disputed reports around the status of its co-founders, highlights the intersecting problems of brand impersonation, cybercrime, and investor vulnerability in India’s digital asset market. With official figures pointing to a dominant share of financial losses arising from investment scams, and with billions lost worldwide to Web3 exploits in 2025, the investigation into the FIR against CoinDCX’s leadership is unfolding in a climate of heightened concern. As authorities assess the roles of impersonators and platform operators, the outcome is likely to influence how exchanges, regulators, and users address security, verification, and trust in India’s crypto ecosystem.
Disclaimer
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from CryptoNewsBytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.
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