Key Highlights
- Co-founders Sumit Gupta and Neeraj Khandelwal were detained on March 21 in a ₹71.6 lakh fraud case but granted bail on March 24 after no prima facie evidence was found.
- The scam was executed via a fake domain (coindcx.pro) by impersonators, with no direct connection to CoinDCX or its founders.
- CoinDCX unveiled D.S.N., a ₹100 crore initiative featuring a 24×7 WhatsApp helpline, Fraud Intelligence API, law enforcement training, and nationwide awareness programs.
Days after walking out of a Thane police lockup, CoinDCX co-founder Sumit Gupta has publicly addressed the arrest of himself and co-founder Neeraj Khandelwal for the first time since the incident.
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In a detailed post on X, Gupta acknowledged the experience was “deeply unsettling” and laid out a series of commitments that the exchange plans to make in response.
The centrepiece of the announcement is what CoinDCX is calling the Digital Suraksha Network, or D.S.N., a Rs 100 crore fund dedicated to building cyber safety infrastructure that the company says India’s digital finance ecosystem “needs but does not yet have.”
What happened with the arrest
For those catching up, here is the sequence. On March 21, 2026, both Gupta and Khandelwal were taken into police custody by Thane Police in connection with a fraud complaint filed by a 42-year-old insurance advisor from Mumbra. The complainant alleged he had been cheated of Rs 71.6 lakh through a scheme involving a website called coindcx.pro, which promised franchise opportunities and high monthly returns linked to CoinDCX.
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Three days later, on March 24, a Thane court granted bail to both founders. Magistrate Nilesh Rathod ruled that, prima facie, no case was made out against them. The investigating officer did not oppose bail. The complainant himself confirmed in court through an affidavit that he did not know the co-founders and had never met them. He further stated he had recovered the disputed amount from one of the other accused and had no grievance against Gupta or Khandelwal.
CoinDCX maintained from the outset that the fraud was carried out through a fake website, coindcx.pro, by impersonators who had no connection to the platform, its systems, or its parent entity, Neblio Technologies Private Limited. The exchange said no money moved through CoinDCX, and no transaction occurred on its platform in connection with the complaint.
What Gupta said in his statement
In his post, Gupta said the experience made “something painfully clear” to the founders. He said the ecosystem they operate in does not yet have the tools to distinguish between people building the industry responsibly and those exploiting it.
He raised a pointed question about the precedent the case sets. According to him, what the incident demonstrated is that if a scammer uses a founder’s brand, name, and face on a fake website and defrauds someone, it is the founder who can be arrested and not the scammer. He called this a problem not limited to crypto but one that extends to any company with a digital footprint.
CoinDCX has previously disclosed that between April 1, 2024, and January 5, 2026, it reported more than 1,212 fraudulent websites impersonating its official domain, coindcx.com. Gupta said that data had been sitting inside the company’s internal systems until now.
What Digital Suraksha Network will include
According to CoinDCX’s announcement, the Rs 100 crore D.S.N. fund will go toward building four specific pillars.
The first is a 24×7 WhatsApp helpline. CoinDCX says this will be free for everyone, not limited to CoinDCX users, and will allow any person to verify links, platforms, and offers before transacting.
The second is an Open Fraud Intelligence API. CoinDCX said it has already documented over 1,200 fraudulent websites impersonating its platform. The company plans to build an open API that will share this intelligence in real time. It has invited every exchange, fintech, bank, and digital lender in India to contribute data to what it described as “a shared immune system for India’s digital finance ecosystem.”
The third pillar is cyber safety infrastructure for law enforcement. The D.S.N. will fund training programmes for state cybercrime cells on blockchain forensics and digital asset tracing. CoinDCX said it has already been working with several law enforcement and government bodies in this area.
The fourth is a nationwide consumer awareness initiative called “Caution Before Transaction,” which the company said is aimed at giving every Indian the tools to participate in digital finance safely.
CoinDCX’s existing work with law enforcement
As part of the announcement, CoinDCX also listed its existing engagements with law enforcement agencies and government bodies.
According to the company, it has partnered with the Enforcement Directorate (ED) to provide secure custody infrastructure for seized digital assets, deploying multi-signature wallets and Multi-Party Computation (MPC) solutions within investigative frameworks. It has worked with the Delhi Police on capacity building and training related to crypto investigations.
The company said it has conducted knowledge sessions on virtual asset investigation at the Sardar Vallabhbhai Patel National Police Academy (SVPNPA) and has engaged in training and collaborative work with the Indian Cyber Crime Coordination Centre (I4C). CoinDCX also cited technical support and information sharing with the Income Tax Department.
On the state level, CoinDCX said it co-launched the Cyber Surakshit Goem campaign with the Goa Police for public cyber fraud awareness and has engaged with Gujarat National Law University on research around crypto asset regulation.
The broader cybercrime numbers
CoinDCX’s announcement referenced several data points about the scale of cybercrime in India. The company cited Ministry of Home Affairs data, reported by ThePrint in February 2026, which said that in 2025, Indians filed 28.15 lakh cybercrime complaints, a 24% spike over the previous year. Total financial losses stood at Rs 22,495 crore, with investment scams alone accounting for 76% of that amount.
Of the 28 lakh complaints filed, only 55,484 became FIRs, a conversion rate of less than 2%, according to the same MHA data.
CoinDCX also cited an ORF/McAfee analysis from 2025, which found that 47% of Indian adults have either experienced or know someone who has been a victim of an AI voice-cloning or deepfake scam. That figure is reportedly nearly double the global average. The analysis found that 83% of those victims suffered monetary loss.
A call to the industry
Gupta acknowledged in his statement that no single company can solve the problem. He described fraud networks as sophisticated, cross-border, and evolving daily, and said that AI is now making them “exponentially harder to catch.”
He said CoinDCX is putting Rs 100 crore on the table because “the ecosystem cannot afford to wait.” He called on every platform, every regulator, and every Indian participating in digital finance to join the effort.
He also framed the initiative in terms of the broader startup ecosystem. He said CoinDCX wants to ensure that anyone building startups in India “can do so with confidence, and not with fear.”
What this means going forward
The D.S.N. announcement comes at a time when CoinDCX has faced repeated challenges over the past year, including a $44.2 million hack in July 2025, multiple senior executive exits, an Enforcement Directorate probe, a GST investigation, and now the arrest and subsequent bail of its co-founders.
The case against the founders may have unravelled quickly in court, but the four other accused named in the original FIR, Akash Rana, Rahul Gupta, P. Vasudev, and Shivam Sharma, remain absconding. The police investigation continues.
Whether the Rs 100 crore commitment translates into meaningful infrastructure or remains a headline will depend on execution. But the underlying problem CoinDCX is pointing to is real. Brand impersonation, fake websites, and social engineering scams have become a systemic issue across India’s digital finance space, and not just in crypto. The fact that the founders of a $2.45 billion company were arrested over a scam they say had nothing to do with them underscores how wide the gap is between the pace of digital fraud and the tools available to address it.
For now, the ball is in CoinDCX’s court to show that the D.S.N. can deliver on what it promises. The exchange has said it will share more details in the coming weeks.
Also Read: India’s CBI Arrests ‘Kingpin’ Behind Crypto Scam Camps in Myanmar
