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A Thane magistrate court granted bail to CoinDCX founders Sumit Surendra Gupta and Niraj Ashok Khandelwal on March 23, finding insufficient evidence to link them to a ₹71 lakh fraud case.
The case centered on a fake website (coindcx.pro) impersonating the legitimate exchange, a growing threat for crypto platforms in India.
The court ruled the founders were not present at the alleged meeting location and the complainant admitted the individuals he encountered were not the defendants—effectively dismantling the prosecution’s case.
In a common order issued on March 23, the Thane magistrate court ruled that the material presented failed to establish even an initial case against the CoinDCX-founders.
The court noted that the investigation officer had “no objection” to granting bail—an unusual but significant detail that strengthened the defense of the CoinDCX founders.
Crucially, the court also observed that both individuals were not present in Mumbra at the time of the alleged offense, further weakening the complaint.
This development underscores a broader issue in crypto-related cases: the difficulty in distinguishing between legitimate platforms and fraudulent impersonators.
The case originated from a complaint filed by an investor who alleged he had been cheated in a transaction supposedly linked to CoinDCX.
However, during the hearing, the court highlighted a key turning point:
“Some other person by representing as accused cheated the informant.”
This statement shifted the focus away from the CoinDCX-founder and toward unknown individuals operating a fraudulent scheme.
According to the company, the scam was executed through a lookalike website—coindcx.pro—which had no connection to its official operations.
The CoinDCX founder emphasized that this was a classic case of third-party impersonation, a growing threat in the crypto ecosystem.
Another critical element in the case was an affidavit submitted by the informant.
In the document, the complainant admitted that the individuals he interacted with during the deal were not the CoinDCX founder.
The meeting had reportedly taken place at a café in Kausa Mumbra, but the identities did not match Gupta or Khandelwal.
Additionally, the affidavit revealed that another accused individual, identified as Rana, had already repaid the lost funds—further weakening the case against the CoinDCX founders.
The court granted bail to the CoinDCX founders on a bond of ₹50,000 each, with conditions requiring their cooperation in the ongoing investigation and any subsequent trial proceedings.
Importantly, the judge noted that the matter had been “amicably settled” between the complainant and the primary accused. This significantly reduced concerns that the CoinDCX-founder could interfere with evidence or witnesses.
Legal experts say such observations often signal a weak prosecution case at an early stage, especially when combined with a lack of direct evidence.
Following the ruling, CoinDCX released a statement reinforcing that the case was rooted in third-party impersonation.
The company warned users about the increasing sophistication of phishing attacks and fraudulent websites targeting crypto investors.
The CoinDCX founders urged users to:
Industry observers note that impersonation scams have surged globally, particularly in emerging crypto markets like India, where rapid adoption has outpaced user awareness.
The case involving the CoinDCX founders highlights a growing challenge for crypto exchanges: reputational risk stemming from external fraud actors.
While the court’s decision offers relief to the CoinDCX founder, it also serves as a cautionary tale for investors navigating an increasingly complex digital asset landscape.
As regulators tighten scrutiny and cybercriminals evolve their tactics, the burden of due diligence is shifting toward both platforms and users.
For now, the CoinDCX founder walk free—but the case underscores a critical reality: in crypto, trust can be exploited just as quickly as it is built.
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