Thane Court Grants Bail to CoinDCX Co-Founders in Impersonation Fraud Case

The co-founders of India's cryptocurrency exchange CoinDCX, Sumit Gupta and Neeraj Khandelwal, were arrested from Bengaluru on March 21 after an FIR was registered at the Mumbra police station in Thane district. Three days later, the case against them unravelled in a courtroom: the complainant told a Thane court he had recovered his investment and held no grievance against the co-founders.

Magistrate Nilesh Rathod ordered their release on a surety of Rs 50,000 each and directed them to cooperate with the ongoing investigation, invoking a constitutional standard that carries weight well beyond this case. "Considering the object of Article 21 of the Constitution of India and the law laid down by the Hon'ble Apex Court that 'bail is the rule and jail is the exception', I hold that the applicants/accused are entitled to bail as prima facie no case was made out against them," Rathod said in his order.

The FIR centered on a complainant whose account shifted significantly once he reached court. The case is based on a complaint filed by a 42-year-old insurance advisor from Mumbra, who alleged that he was cheated of Rs 71.6 lakh between August 2025 and March 2026 after being promised high returns through a firm said to be linked to the cryptocurrency platform. The FIR was registered on March 16 at Mumbra police station against the two founders and four others on charges including cheating, criminal breach of trust, and fraud. The co-founders were charged with Sections 3(5), 316(2), 316(5) and 318(4) of the Bharatiya Nyaya Sanhita, which pertain to cheating, fraud, and criminal breach of trust.

The complainant filed an affidavit with the Thane District Court claiming that he had recovered his money from one of the six accused named in the FIR. He told the court he did not know the co-founders, a statement that proved decisive. The other four individuals accused, apart from the CoinDCX founders, remain absconding, and police said the probe was continuing.

The defense built its case around impersonation rather than innocence by denial alone. Lawyers Abhijeet Sawant, Pranav Badheka, and Rajan Salunke told the court that the co-founders had no role in the case and were victims of "mistaken identity" and fraudulent impersonation. The lawyers also told the court that Gupta and Khandelwal were elsewhere at the time of the alleged meetings and were themselves victims of identity misuse. The defense further informed the court about a 2024 Delhi High Court order obtained by CoinDCX, operating under its corporate name Neblio Technologies, restraining unknown persons from misusing the company's name, and pointed out that the company had already posted disclaimers on its website and app warning users about brand misuse by fraudsters.

The case involves impersonation through a fraudulent website, coindcx.pro, that was created by unknown actors. Between April 2024 and January 2026, CoinDCX reported identifying more than 1,212 fake websites impersonating its official domain, a figure that illustrates how systematically the exchange's brand had been weaponized against retail investors.

CoinDCX responded sharply to the episode. "CoinDCX strongly condemns such illegal activities. Responsibility lies with those who plan and carry out these scams, not with institutions whose identities are unlawfully exploited," the company said. The company added that it continues to operate normally, with trading, deposits, withdrawals, and all user services remaining fully operational, and that user assets stay secure, supported by full proof of reserves and independent audits.

Maharashtra Police arrested Gupta and Khandelwal from CoinDCX's Bengaluru office in relation to the FIR filed at the Mumbra Police Station on March 16. They were initially sent to police custody until Monday and later to judicial custody before their bail plea was heard and granted on Tuesday. The four remaining accused are still at large, leaving the core criminal investigation unresolved even as the founders walk free.