Thane, March 24 A court in the Thane district granted bail to two co-founders of cryptocurrency exchange CoinDCX, Sumit Gupta and Neeraj Khandelwal, who were arrested in an alleged case of cheating involving Rs 71.60 lakh, stating that there was no prima facie evidence against them.
Magistrate Nilesh Rathod, while granting their bail, ordered their release after they furnished a surety of Rs 50,000 each.
Gupta and Khandelwal's legal team argued before the court that they were victims of mistaken identity and fraudulent impersonation.
The co-founders, against whom the alleged cheating case was registered at the Mumbra police station in the Thane district, were arrested from Bengaluru last Saturday (March 21). Following their arrest, they were initially remanded in police custody until Monday by a local court.
They were subsequently sent to judicial custody after the complainant filed an affidavit in the court stating that he had received the disputed amount from one of the six accused in the case. The complainant further stated that he did not know the arrested co-founders.
Immediately after being sent to jail, Gupta and Khandelwal moved a bail application, which was heard by the court on Tuesday.
Appearing for the duo, advocates Abhijeet Sawant, Pranav Badheka, and Rajan Salunke argued that their clients had no involvement in the alleged crime.
The defence team argued that the individuals the complainant actually met were not the co-founders, but persons merely pretending to be Gupta and Khandelwal.
The lawyers stated that the CoinDCX co-founders were elsewhere at the time of the alleged meetings and claimed that their clients were themselves victims of identity misuse.
The defence counsels submitted that this was a clear case of mistaken identity.
They argued that while the complainant was indeed deceived with the promise of a partnership and returns, the real culprits had merely impersonated the directors of CoinDCX to carry out the fraud.
"The real accused used the names of the directors and the company, thereby cheating the complainant. However, the individuals arrested were not the ones who met the complainant," the defence submitted.
The legal team informed the court about a 2024 order obtained by CoinDCX (Neblio Technologies) from the Delhi High Court. This protective order was specifically aimed at preventing unidentified parties from unlawfully using the company's name.
The defence pointed out that the company had proactively posted disclaimers on its website and app, warning people about how their brand was being misused by fraudsters in the market.
After noting that the complainant had filed an affidavit stating that he had received the duped amount from another accused, the Thane court ordered the release of the CoinDCX co-founders and directed them to cooperate with the ongoing investigation into the cheating case.
The court cited the legal principle of "bail is the rule, jail is the exception" while providing relief to them.
"Considering the object of Article 21 of the Constitution of India (related to the protection of life and personal liberty) and the law laid down by the Hon'ble Apex Court that is "bail is rule and exception is jail", I hold that the applicants/accused are entitled to bail as there is no prima facie evidence against them," the magistrate said.
The police said on Monday that the investigation is ongoing despite the complainant's affidavit, and that all efforts are being made to apprehend the other four accused.
The arrests were made following an FIR registered on March 16 at the Mumbra police station against Gupta, Khandelwal and four others on charges of cheating, criminal breach of trust and fraud, according to officials.
The complainant, a 42-year-old insurance advisor from Mumbra, had claimed he was duped of Rs 71.6 lakh between August 2025 and March this year after being lured by promises of high returns by investing in a firm, purportedly associated with the cryptocurrency platform.
The complainant transferred Rs 71,60,015 through cash and online transactions at different times.
However, the invested amount was not returned, and instead, the funds were allegedly misappropriated, according to police.
The company, however, in a statement on Monday, claimed, "The FIR filed against our co-founders is false, and has been filed as a conspiracy against CoinDCX by impersonators posing as Founders of CoinDCX and cheating the public at large."
"We have taken cognizance of the fact and published a notice to the public at large on our website that CoinDCX is being targeted by fraudsters. The entire conspiracy falsely claims that funds were transferred in cash to third-party accounts which have no relation to CoinDCX," it added.
