Key Takeaways
- The co-founders of CoinDCX were granted bail by a Thane court after 72 hours of police interrogation.
- The court noted that the complainant had recovered his money from another accused and had filed an affidavit withdrawing his grievances against the founders.
- Police found no evidence linking the real executives to the fraud, which involved impersonators misusing the CoinDCX brand.
What began as a high-profile arrest of two of India’s most prominent crypto executives has quickly unraveled in court.
A Thane magistrate has granted bail to CoinDCX co-founders Sumit Gupta and Neeraj Khandelwal, ruling that there was no prima facie case linking them to an alleged fraud that initially led to their arrest.
Within days, the case shifted from a serious criminal probe to what now appears to be a case of impersonation and brand misuse.
Court Grants Bail
On March 24, Judicial Magistrate Nilesh Rathod ordered the release of both founders on a personal recognisance bond of Rs 50,000 ($500) each.
The court also directed them to cooperate fully with the ongoing investigation.
The turning point came when the complainant, a 42-year-old insurance advisor from Mumbra, submitted an affidavit stating that he had recovered the full Rs 71.6 lakh ($83,000) from Gupta and Khandelwal and no longer had any grievance against them.
Police did not oppose bail. Case records also showed that neither founder was present in Mumbra at the time of the alleged transactions.
Taken together, these developments significantly weakened the case.
What initially appeared to be a direct fraud allegation against CoinDCX leadership quickly lost ground once evidence pointed elsewhere.
From Arrest to Release in Days
The case began with an FIR filed on March 16 at the Mumbra police station.
The complainant alleged he had been lured into a crypto investment and franchise scheme promising monthly returns of 10–12%.
According to the complaint, the accused used CoinDCX branding, documents, and the names of senior executives to build credibility.
The victim transferred Rs 71,60,015 through a mix of cash and online payments.
The FIR named six individuals, including Gupta and Khandelwal, under charges of cheating, criminal breach of trust, and fraud.
Police moved quickly. A team traveled to Bengaluru, where the founders are based, and arrested them on March 22.
They were produced before a magistrate the following day and remanded to police custody for around 72 hours of interrogation before being moved to judicial custody.
During questioning, investigators focused on whether the founders had any operational link to the alleged scheme.
Investigation Points to Impersonation
As the probe progressed, the case began to shift.
CoinDCX maintained from the outset that the complaint was false and the result of fraudsters impersonating its executives.
The company pointed to fake websites and coordinated scams that misuse its brand.
Investigators ultimately found no direct evidence connecting the founders or CoinDCX’s official operations to the fraud.
The complainant later confirmed he had never interacted directly with Gupta or Khandelwal.
The court also noted that the founders were not present in the location where the transactions took place.
The investigation is ongoing, with police now focusing on identifying and tracking the remaining accused.
No charges have been formally framed against the founders.
A Relief for CoinDCX—and a Warning for Users
For CoinDCX, the episode caused a brief but significant reputational shock.
The Mumbai-based exchange is one of India’s largest crypto platforms, with over 2 crore registered users and a strong presence across Tier-2 and Tier-3 cities.
It offers a wide range of products, from spot trading to derivatives and structured investment plans, and processes substantial trading volumes despite regulatory uncertainty.
The founders’ release brings relief, but the case highlights a broader issue facing the industry: the growing sophistication of impersonation scams.
Fraudsters leveraging trusted brand names, fake interfaces, and high-return promises continue to target retail investors, particularly in emerging markets where crypto adoption is rising quickly.
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Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
Beyond his professional pursuits, Prashant is an avid music enthusiast, often exploring diverse genres to unwind. A sports lover, he has a particular passion for cricket and frequently engages in discussions about the game. His multifaceted interests and sharp journalistic instincts make him a valuable contributor to CCN, where he continues shaping the crypto landscape's narrative.
