CoinDCX Denies Fraud as Founders Face Police Probe

The CoinDCX impersonation scam at the center of a Thane police probe is not the exchange's doing — that's the company's position, anyway. On Sunday, India's largest crypto exchange pushed back hard against fraud allegations that landed its founders, Sumit Gupta and Neeraj Khandelwal, in a police interrogation room, saying the entire case traces back to bad actors who built a fake CoinDCX operation, complete with the exchange's logo, documents, and a pitch promising double-digit returns that had nothing to do with the real platform.

What Happened: FIR, Founders, and a $76,000 Loss

The FIR — India's formal police complaint — was registered in Thane after a Mumbra-based insurance consultant reported being cheated out of $76,000 (roughly Rs 71.6 lakh) between August 2025 and March 2026. He was drawn in by a pitch promising 10-12% returns, backed by what appeared to be official CoinDCX founders questioned branding and documentation. Two associates also lost money — one $26,000 (Rs 25 lakh), another $21,000 (Rs 20 lakh).

The FIR names Gupta and Khandelwal among others, which triggered police questioning of the two executives. CoinDCX has not directly addressed whether the founders were formally arrested, but it rejected the FIR's core allegations outright. The exchange said the complainant has no account or association with its platform and that no funds were ever routed through CoinDCX systems.

The FIR filed against our co-founders is false and filed as a conspiracy against CoinDCX by impersonators posing as Founders of CoinDCX and cheating the public at large.

1,212 Fake Websites — Is That Enough of a Warning?

Here's the number that deserves more scrutiny than it's getting: 1,212. That's how many fake websites impersonating CoinDCX impersonation scam operations CoinDCX says it identified between April 1, 2024 and January 5, 2026 — fewer than two years. The exchange says it has been flagging fraudulent websites to law enforcement and running user awareness campaigns.

That figure is staggering. More than 1,200 fake websites in under two years is not just a scammer problem — it reflects how systematically bad actors have built an entire shadow industry around CoinDCX's brand. And if over a thousand fake sites were identified, the question isn't whether CoinDCX is at fault. The question is whether the infrastructure to take them down quickly enough actually exists.

CA Sonu Jain, chief risk and compliance officer at 9Point Capital, framed the situation bluntly — pointing out that this type of attack is now routine across Indian crypto.

This appears to be a classic case of impersonation fraud. Indian VASPs have repeatedly cautioned users and flagged such fraudulent websites to law enforcement. Bad actors often exploit trusted brands to build credibility.

Why Were CoinDCX Founders Questioned if They're Innocent?

What does an FIR actually mean for crypto executives in India?

An FIR — First Information Report — is simply a formal record that police acknowledge a cognizable offence was reported. Getting named in one does not mean guilt, and founders of a named company being called in for questioning is, legally speaking, a procedural step. Jain made that point clearly, separating the act of questioning from any implication of wrongdoing.

Still, optics matter. Being questioned by police in connection with a $76,000 fraud, even as an exchange that claims to be a victim of identity theft, is not a great look for any company — let alone one that had a rough 2025 already. Last July, CoinDCX founders arrested fraud headlines were preceded by a different crisis: a $44.2 million treasury breach in which attackers siphoned funds from an internal account using compromised credentials. A Bengaluru-based software engineer at the firm was later arrested for allegedly enabling that hack.

Founders being called for questioning in such cases should not be mistaken for culpability. It's a procedural step once an FIR is registered.

The Regulatory Gap That Keeps This Happening

Jain's sharpest take wasn't about CoinDCX specifically — it was about the system around it. India's crypto regulatory framework, such as it is, leaves meaningful gaps in how fraudulent domains get taken down, how exchanges coordinate with agencies like FIU-India, I4C, and CERT-In, and who ultimately bears responsibility when an impersonation scheme causes real investor harm.

Vedang Vatsa, founder of global crypto community Hashtag Web3, put it in broader terms — acknowledging that the CoinDCX situation, whatever its ultimate resolution, points to a systemic failure that touches everyone in the chain.

Whatever the outcome here, it would be worth reflecting on whether enough is being done around financial literacy and due diligence across the board, by users, builders, and regulators.