The co-founders of CoinDCX, India's largest cryptocurrency exchange by valuation, have been arrested in connection with an alleged crypto investment fraud, according to multiple Indian media reports.
Sumit Gupta and Neeraj Khandelwal were detained in Bengaluru and produced before a weekend magistrate's court, which remanded them to police custody until March 23. The Economic Times first reported the arrests on Saturday, citing Thane Police officials and allegations of criminal breach of trust.
The case centers on a First Information Report (FIR) filed on March 16 by a 42-year-old insurance consultant from Mumbra, a suburb in the Thane district of the Mumbai metropolitan area. The complainant alleges he was defrauded of approximately 71.6 lakh rupees, or roughly $85,000, after being promised high returns and franchise rights tied to CoinDCX between August 2025 and February 2026, according to the reports. The FIR names six individuals total, including Gupta and Khandelwal alongside four others.
Entrackr, which appears to have broken the story in English, reported that both founders were questioned at Bellandur Police Station in Bengaluru on Friday as part of a Thane Police-led investigation, citing three anonymous sources. The Economic Times reported the following day that the situation had escalated to a formal arrest, with both founders produced before a weekend magistrate's court and remanded to police custody until Monday.
CoinDCX responded swiftly, calling the FIR "false and filed as a conspiracy against CoinDCX by impersonators posing as Founders of CoinDCX," the company said in a post on X on March 21.
"Brand impersonation and related cyber frauds are an increasing concern in India’s digital finance ecosystem, and we strongly condemn such actions," the statement reads. "We remain fully committed to supporting authorities in addressing such misconduct. Between April 1, 2024 and January 5, 2026, we have reported over 1,212 fake websites impersonating coindcx.com."
A source close to the news told Indian business news outlet Moneycontrol that the fraud was carried out through a fake website using the domain coindcx.pro, which has no connection to CoinDCX. The source added that the complainant never contacted CoinDCX directly before filing the report, and that the co-founders were "taken aback by the sudden complaint."
The arrests add to what has been a difficult period for CoinDCX, which is valued at $2.45 billion following a Coinbase Ventures investment announced in Oct. 2025. India's Competition Commission approved the minority stake acquisition in December.
In July 2025, CoinDCX suffered a $44 million exploit after hackers used a fake job offer to trick a software engineer into installing malware on a company laptop. Bengaluru police subsequently arrested the employee, Rahul Agarwal, alleging his compromised credentials were used to drain funds from an internal operational wallet. CoinDCX covered the loss from its treasury and said customer assets were unaffected.
Founded in 2018 by Gupta and Khandelwal, both IIT Bombay alumni, CoinDCX claims over 20 million registered users and $165 billion in annualized transaction volume. The exchange became India's first crypto unicorn in 2021 after raising $90 million at a $1.1 billion valuation.
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