Crypto Exchange Founders Arrested in Scam Impersonation Scheme

CoinDCX co-founders Sumit Gupta and Neeraj Khandelwal faced arrest due to an FIR alleging cheating and financial fraud. The Indian cryptocurrency exchange characterized the legal action as a result of an elaborate impersonation conspiracy, asserting that external malicious actors were responsible.

According to CoinDCX, over 1,212 fraudulent websites were identified that mimicked its platform, suggesting the complainants were victims of these third-party scams. The exchange clarified that its legitimate infrastructure remained secure, with no user data or funds compromised from its official ecosystem.

These fake sites, often using slightly altered URLs, are part of a growing trend of 'pig butchering' and phishing scams in India's crypto landscape. CoinDCX has been collaborating with the Ministry of Electronics and Information Technology (MeitY) and cybercrime cells to combat these domains and emphasized that it does not solicit funds via unauthorized channels.

The company's legal team is providing evidence to law enforcement to highlight the distinction between the official exchange and the fraudulent entities. CoinDCX maintains that the FIR is based on a misunderstanding of external market fraud and is urging users to verify all communications through official channels.