Crypto Shock CoinDCX Founders Arrested in ₹15,000 Crore Alleged Fraud Case

In a massive blow to India’s digital asset ecosystem, Sumit Gupta and Neeraj Khandelwal, the high-profile founders of one of the country’s largest cryptocurrency exchanges, CoinDCX, have been arrested by the Economic Offences Wing (EOW) of the Delhi Police. The arrests follow a multi-city investigation into allegations of cheating, criminal conspiracy, and money laundering involving an estimated ₹15,000 crore in investor funds. Authorities allege that the exchange misled users regarding its liquidity reserves and engaged in “wash trading” to artificially inflate the value of its native tokens, while several high-net-worth investors reported being unable to withdraw significant assets over the past six months.

Responding to the arrests, CoinDCX issued an official statement late Monday evening, describing the move as a “procedural misunderstanding” related to ongoing regulatory inquiries. The company maintained that its operations remain fully functional and that user funds are “100% safe and backed by audited reserves.” However, the news has triggered a wave of panic withdrawals across Indian crypto platforms, leading to a temporary suspension of several fiat-to-crypto gateways. As the founders are held in police custody for further interrogation, legal experts suggest this case could accelerate the central government’s push for a more stringent legislative framework to regulate private digital currencies in India.