A Thane magistrate released CoinDCX co-founders Sumit Gupta and Neeraj Khandelwal on Tuesday after ruling no prima facie case existed against them. The order came just days after the pair were picked up from Bengaluru on March 21 in connection with a Rs 71,60,015 fraud complaint filed at the Mumbra police station.
Magistrate Nilesh Rathod set bail at Rs 50,000 surety each. The ruling rested on two things: the complainant’s own affidavit and a constitutional principle the court cited directly.
Complainant’s Affidavit Cracked the Case Open
The complainant, a 42-year-old insurance advisor from Mumbra, filed an affidavit in court stating he had received the disputed amount back from one of the six accused. He further stated he does not personally know Sumit Gupta or Neeraj Khandelwal. That statement, submitted by the prosecution’s own witness, did much of the defence’s work for them.
Advocates Abhijeet Sawant, Pranav Badheka, and Rajan Salunke appeared for the duo, according to Economic Times. Their argument: Gupta and Khandelwal were not present at any alleged meetings with the complainant. The individuals the complainant actually dealt with had merely used the founders’ names and the CoinDCX brand to carry out the scheme.
The defence also pointed to a 2024 Delhi High Court order obtained by CoinDCX’s parent entity, Neblio Technologies. That protective order was specifically aimed at stopping unidentified parties from misusing the company name. The co-founders, the lawyers argued, were victims themselves.
How Impersonation Became the Defence
It was not just oral argument. CoinDCX had placed active disclaimers on its website and app well before the arrest, warning the public about fraudsters misusing its brand. Those materials became part of the defence record in court.
CryptooIndia on X summarised the court’s position plainly, posting that the court confirmed CoinDCX founders were impersonated, the scam was third-party phishing, and exchange operations remain normal. The post flagged the fake domain coindcx.pro versus the official coindcx.com, calling on users to verify links before transacting.
“Big Update: CoinDCX Case. Court says CoinDCX founders were impersonated. Scam was third-party phishing. Exchange says funds safe, operations normal. Fake site: coindcx .pro Official: coindcx .com Always verify & check website links.”
— CryptooIndia, on X
That scam warning is still live. CoinDCX’s official fraud awareness page details how fraudsters impersonate its founders and operate counterfeit platforms. The banner on its homepage remains active.
Magistrate Quotes the Constitution
The bail order itself was pointed. Magistrate Rathod invoked Article 21 of the Indian Constitution, which covers the right to life and personal liberty, and cited Supreme Court doctrine holding that bail is the rule and detention the exception.
“Considering the object Article 21 of the Constitution of India and the law laid down by the Hon’ble Apex Court that is ‘bail is rule and exception is jail’, I hold that applicants are entitled for bail as prima facie no case was made out against them,” the magistrate held, per Economic Times.
The duo had moved their bail application immediately after being transferred to judicial custody. The court heard the application the same Tuesday it was filed.
Police confirmed Monday the broader investigation continues. Four other accused remain at large. Authorities say the ongoing probe into the alleged fraud will not be affected by the bail order granted to the co-founders.
The FIR, registered March 16, had named Gupta, Khandelwal, and four others under charges of cheating, criminal breach of trust, and fraud. The backstory, including the arrest details and CoinDCX’s full initial statement, was reported earlier here.
CoinDCX, in its original statement on X posted March 21, had described the FIR as a conspiracy by impersonators. The exchange reiterated that no official funds were involved and urged users to only transact through verified channels.
The CoinDCX founders bail outcome closes one chapter. The question of who actually ran the impersonation ring, and how far it extended, is still open.
Key Takeaways:
- Thane court freed Sumit Gupta and Neeraj Khandelwal on Rs 50,000 surety each, ruling no prima facie case was made out.
- Court grants CoinDCX founders bail after complainant admits not knowing the arrested duo.
- Complainant’s own affidavit confirmed he recovered disputed funds from a different accused.
- Four other suspects remain at large as the Mumbra police fraud probe continues.
