Magistrate Nilesh Rathod, while allowing their bail plea, ordered the duo’s release upon furnishing a surety of Rs 50,000 each.
Gupta and Khandelwal’s legal team argued before the court that they were victims of a “mistaken identity” and fraudulent impersonation.
The co-founders, against whom the alleged cheating case was registered at the Mumbra police station in Thane district, were arrested from Bengaluru last Saturday (March 21). Following their arrest, they were initially remanded to 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 he had received the disputed amount from one of the six accused in the case. The complainant further stated that he does 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 role in the alleged crime.
The defence submitted that the individuals the complainant actually met were not the co-founders, but persons merely purporting to be Gupta and Khandelwal.
The lawyers stated that the CoinDCX co-founders were elsewhere at the time of the alleged meetings and claimed 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 duped of more than Rs 71 lakh under the pretext of a franchisee partnership and promised 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 how their brand was being misused by fraudsters in the market.
After noting that the complainant had filed an affidavit stating he has received the duped amount from another accused, the Thane court ordered the CoinDCX co-founders’ release and directed them to cooperate with the ongoing probe 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 Article 21 of the Constitution of India (related to 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 applicants/accused are entitled for bail as prima facie no case was made out against them,” the magistrate said.
The police said on Monday the probe remains ongoing despite the complainant’s affidavit and all efforts were on to nab four other 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, as per police.
The company, however, in a statement on Monday, claimed, “The FIR filed against our co-founders is false, and filed as a conspiracy against CoinDCX by impersonators posing as Founders of CoinDCX and cheating the public at large.” “We have taken cognisance of the fact and published a notice to 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.