CoinDCX, one of India’s prominent cryptocurrency exchanges, has dismissed fraud allegations connected to a police investigation, asserting that the case involves impersonators who posed as company representatives to deceive investors. The exchange’s co-founders, Sumit Gupta and Neeraj Khandelwal, were questioned as part of a probe into a crypto investment scam, according to a report by Entrackr. CoinDCX stated on X that the case is a conspiracy orchestrated by fraudsters exploiting its brand and founders’ identities. The company has not publicly addressed reports that the founders were arrested.
According to the report, a Mumbra-based insurance consultant was drawn into a scheme that promised returns of 10 to 12 percent using CoinDCX branding and documentation. A First Information Report was registered in Thane, naming the company’s founders among others. The consultant reported total losses of $76,000 between August 2025 and March, which included his own investment of $28,000 as well as funds contributed by two associates amounting to $26,000 and $21,000 respectively. CoinDCX has stated that the complainant has no association with its platform and denied that any funds were routed through its systems.
The exchange described the situation as part of a broader pattern of impersonation activity, disclosing that more than 1,212 fake websites mimicking its platform were identified between April 1, 2024, and January 5, 2026. CoinDCX said it is cooperating with law enforcement and working to raise user awareness to prevent further incidents. The company characterized the allegations as entirely false, stating that claims of cash transfers to third-party accounts unrelated to CoinDCX are fabricated.
CA Sonu Jain, chief risk and compliance officer at 9Point Capital, described the situation as a classic case of impersonation fraud, noting that such schemes are increasingly common in the Indian crypto sector. He explained that bad actors frequently exploit well-known brands to establish credibility with potential victims. Jain also clarified that the founders being summoned for questioning should not be interpreted as an indication of guilt, describing it as a standard procedural step following the filing of an FIR. Indian virtual asset service providers, he noted, have repeatedly warned users and reported fraudulent websites to authorities.
Jain pointed to deeper structural issues, arguing that the absence of clear regulatory standards and investor protection frameworks in India allows such incidents to continue. He called on regulators to define platform responsibilities more precisely and to enable faster removal of fraudulent domains. He also urged formalised coordination between FIU-India, I4C, CERT-In, and crypto exchanges to proactively address scams. Without such measures, he warned, the regulatory gaps will continue to be exploited.
Vedang Vatsa, founder of global crypto community Hashtag Web3, said the episode raises broader questions about financial literacy and due diligence among users, developers, and regulators alike. He suggested that regardless of the outcome, all stakeholders should reflect on whether sufficient efforts are being made in these areas. The allegations arrive after a turbulent period for CoinDCX, which last July disclosed a $44.2 million treasury breach. A Bengaluru-based software engineer employed at the firm was arrested for allegedly facilitating the hack, in which attackers accessed an internal account using compromised credentials.
Originally reported by Decrypt.
