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CoinDCX’s founders under fire in $75K fraud case: Details

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CoinDCX’s founders under fire in $75K fraud case: Details

CoinDCX, an Indian cryptocurrency exchange backed by Coinbase, is embroiled in a fraud case involving its founders, Sumit Gupta and Neeraj Khandelwal. 

Summary

  • CoinDCX founders questioned over a $75K fraud involving fake websites impersonating the platform.
  • Over 1,200 websites impersonating CoinDCX were reported, highlighting rising cyber fraud in India.
  • Investment scams accounted for 76% of all financial losses in India in 2025, according to reports.

Meanwhile, the founders were questioned by authorities following allegations of their involvement in a crypto investment scam. However, CoinDCX denies the accusations and attributes the fraud to impersonators using its brand for fraudulent activities.

The controversy started after a complaint from a 42-year-old insurance consultant, who claimed to have lost around 71 lakh rupees (roughly $75,000) after investing in a fake website posing as CoinDCX. The Thane Police reportedly arrested Gupta and Khandelwal on allegations of criminal breach of trust. However, other reports suggested that the founders were merely questioned by the authorities rather than arrested.

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CoinDCX responded to the claims, stating that the complaint was part of a broader scheme by fraudsters who impersonated the exchange. The company clarified that it had no connection to the fake website and assured the public that funds were diverted by external parties unrelated to the exchange.

CoinDCX has emphasized that brand impersonation and cyber fraud are growing issues in India’s digital finance sector. The exchange stated that it is fully cooperating with law enforcement authorities in their investigation and stressed the importance of educating users about online fraud.

The company revealed that between April 2024 and January 2026, over 1,200 websites had impersonated its domain. This highlights the increasing risks of phishing attacks targeting crypto users in India, with CoinDCX working to combat such fraud.

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A Broader Issue of Investment Scams

The case comes amid a rise in investment scams in India, which accounted for 76% of all financial losses in 2025, according to data from the Ministry of Home Affairs. Globally, Web3 platforms also faced significant losses due to hacking and exploitation, amounting to nearly $4 billion in 2025.

CoinDCX, founded in 2018, is one of India’s leading crypto exchanges, with a valuation of $2.45 billion after an investment from Coinbase Ventures in 2025. Despite the recent controversy, the platform remains committed to maintaining user security and combating fraudulent activities.

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Crypto World

Ether Machine Abandons Public Debut as Dynamix Merger is Terminated

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Ether Machine Abandons Public Debut as Dynamix Merger is Terminated

Ether Machine has called off its planned public debut after the Ethereum treasury-focused firm and Dynamix Corporation agreed to terminate their merger, citing deteriorating market conditions.

In a Saturday post on X, Ether Machine said the decision to end the deal was mutual and effective immediately. The transaction had aimed to take the firm public through a merger with the Nasdaq-listed special purpose acquisition company (SPAC), alongside involvement from The Ether Reserve LLC.

“The Ether Reserve LLC, together with certain other parties thereto, announced today that they have mutually agreed to terminate their previously announced Business Combination Agreement, effective immediately, as a result of unfavorable market conditions,” the firm wrote.

According to a filing with the US Securities and Exchange Commission, an unnamed “Payor,” identified in Annex A of the agreement but not disclosed publicly, must pay $50 million to Dynamix within 15 days of the termination taking effect.

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Related: Bitmine uplists to NYSE as share buyback is increased to $4B

Ether Machine’s $1.5 billion Ethereum treasury plan collapses

Ether Machine first announced plans to launch what it described as the largest yield-bearing Ether (ETH) fund aimed at institutional investors in July last year. At the time, the company, co-founded by former Consensys executives Andrew Keys and David Merin, said it would list on Nasdaq under the ticker “ETHM,” launching with more than 400,000 ETH, worth over $1.5 billion at the time, under management.

In September, Ether Machine secured $654 million in a private financing round, including 150,000 ETH from Ethereum advocate Jeffrey Berns, who also joined the company’s board. The raise was part of its broader plan to build a large Ether treasury ahead of the planned Nasdaq debut, which has now been canceled.

Top Ether treasury firms. Source: EthereumTreasuries.NET

Meanwhile, Dynamix retains a limited window to secure a new deal. The company has until November 22, 2026, to complete another business combination. If it fails to do so, it will be required to liquidate and return funds held in trust to shareholders, in line with its corporate charter.

Related: Peter Thiel’s Founders Fund dumps ETHZilla stake as ETH treasuries face pressure

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Ethereum treasury exits deepen

Ether funds exit amid mounting pressure on Ethereum treasury strategies. Trend Research has fully unwound its Ethereum position, selling 651,757 ETH worth about $1.34 billion while locking in an estimated $747 million loss.

Separately, ETHZilla, formerly a biotech firm that pivoted into an Ethereum treasury strategy during the 2025 hype, has also moved away from Ether accumulation, updating its corporate name and brand to Forum Markets.

Magazine: Bitcoin’s ‘biggest bull catalyst’ would be Saylor’s liquidation — Santiment founder