The Thane magistrate court has ruled that no prima facie case could be made against CoinDCX co-founders Sumit Gupta and Neeraj Khandelwal in an alleged ₹71.6 lakh fraud case, granting them bail after a swift judicial review. The decision came only days after their arrest and rested on evidence indicating that the scheme was carried out by third-party impersonators rather than by the exchange’s leadership.
The case began with an FIR filed on March 16, 2026, naming six individuals, including Gupta and Khandelwal, in connection with alleged losses tied to cryptocurrency investment and franchise-related claims. After reviewing the investigative material and the complainant’s sworn affidavit, the magistrate granted bail, finding that the record did not establish a direct connection between the founders and the alleged offence.
Read what the Court said. pic.twitter.com/l23t6n08HM
— CoinDCX : India Ka Crypto Coach (@CoinDCX) March 24, 2026
Court Focused on Evidence of Impersonation
A central part of the court’s reasoning was the evidence that the fraud had been driven by impersonation rather than by CoinDCX itself. The material before the court pointed to counterfeit websites, including a phishing domain styled as “coindcx.pro,” which was designed to resemble the legitimate “coindcx.com,” and that pattern of deception helped shift the focus away from the company’s management and toward external actors.
The complainant’s own position also proved important. In an affidavit, the complainant stated that the disputed funds had been recovered from another accused and that there were no remaining grievances against Gupta and Khandelwal. The court then released both founders on personal recognisance bonds of ₹50,000 each, while also directing them to cooperate with the ongoing investigation, and the fact that the investigating officer did not oppose bail further weakened the case against them at this stage.
CoinDCX has argued throughout that the allegations stemmed from fabricated claims linked to brand impersonation. The exchange said it had identified more than 1,212 fake websites between April 1, 2024 and January 5, 2026, and that record reinforced its position that the real threat came from phishing networks exploiting the company’s name rather than from internal misconduct.
The Case Still Carries Broader Implications
Even though the ruling removes an immediate legal overhang from CoinDCX’s top executives, it also highlights a wider problem for the crypto sector. Brand impersonation can create legal, operational and reputational damage even when an exchange’s own systems are not the source of the fraud. That makes anti-phishing controls, domain monitoring and faster coordination with law enforcement more important for exchanges operating in India’s evolving digital-asset market.
The investigation remains open, and the founders are still required to assist authorities as the case continues against the alleged impersonators. For investors, the ruling brings some short-term clarity around CoinDCX’s leadership, but it also serves as a reminder that fake domains and third-party intermediaries remain a serious point of risk in crypto-related transactions.
