CoinDCX Rebukes Fraud Allegations, Points to Impersonation Scam in Police Probe

Indian crypto exchange CoinDCX on Sunday dismissed fraud allegations tied to a police investigation, saying the case stems from impersonators posing as its founders and misusing its brand to defraud investors.

The response follows a report by Entrackr that the exchange’s founders, Sumit Gupta and Neeraj Khandelwal, were questioned as part of an investigation into a crypto investment scam involving individuals posing as CoinDCX representatives.

“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,” the company said in a post on X, adding it has issued a public notice warning, “CoinDCX is being targeted by fraudsters.”

“The entire conspiracy falsely claims that funds were transferred in cash to third-party accounts which have no relation to CoinDCX,” the platform said.

Decrypt has reached out to CoinDCX for further clarification; the company has not addressed reports of the founders’ arrest.

A Mumbra-based insurance consultant was reportedly lured into a scheme promising 10–12% returns using CoinDCX branding and documents, according to the report, with an FIR registered in Thane naming the company’s founders among others.

He reported losses of $76,000 (Rs 71.6 lakh) between August 2025 and March, including $28,000 (Rs 26.6 lakh) he invested, while two associates invested $26,000 (Rs 25 lakh) and $21,000 (Rs 20 lakh). 

“This appears to be a classic case of impersonation fraud,” CA Sonu Jain, chief risk and compliance officer at 9Point Capital, told Decrypt, citying a pattern that is “increasingly common in the Indian crypto space.”

“Indian VASPs have repeatedly cautioned users and flagged such fraudulent websites to law enforcement,” Jain said, noting that bad actors often exploit trusted brands to build credibility. 

“Founders being called for questioning in such cases should not be mistaken for culpability,” he added, describing it as “a procedural step once an FIR is registered.”

An FIR, or First Information Report, is a formal record of a complaint by the police when they receive information that a cognizable offence has been committed.

Lack of ‘clear regulatory standards’

“The larger issue is the absence of clear regulatory standards and investor protection frameworks in India,” Jain said, warning that gaps in oversight allow “such incidents to persist.”

“Regulators should now focus on clearly defining platform responsibilities, enabling faster takedown of fraudulent domains, and formalising coordination between FIU-India, I4C, CERT-In, and crypto exchanges to proactively curb such scams,” Jain added.

CoinDCX said the complainant has no association with its platform and rejected claims that funds were routed through its systems. 

The exchange flagged the scale of impersonation activity, reporting more than 1,212 fake websites impersonating its site between April 1, 2024, and January 5, 2026. 

CoinDCX said it is cooperating with law enforcement and continuing its efforts to raise user awareness to prevent such incidents.

“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,” Vedang Vatsa, Founder of global crypto community Hashtag Web3, told Decrypt.

The development comes after a volatile year for the exchange. 

Last July, CoinDCX disclosed a $44.2 million treasury breach, with a Bengaluru-based software engineer at the firm arrested for allegedly enabling the hack in which attackers siphoned from an internal CoinDCX account using compromised credentials.