The CEO of CoinDCX, Sumit Gupta, has denied rumors that the cryptocurrency exchange has scammed some of its users. This reaction followed media reports that purportedly quoted unidentified Delhi police officers and stated that CoinDCX demanded additional payment from consumers in order to execute withdrawals, promising to remove taxes and reimburse them from the company. Gupta claimed that other phony websites with names similar to CoinDCX were causing the confusion, not CoinDCX.

“We have discovered that consumers have claimed fraud connected to using CoinDCX’s app, as per the recent article published in a media site. We would want to clarify that there has never been an incidence of this nature on the CoinDCX app or website. It looks that this problem is, regrettably, an instance of a phony website fraud This is pervasive throughout the sector. Many fintech companies and financial apps, including cryptocurrency apps, confront the difficulty of fraudulent websites and URLs imitating financial applications in order to trick customers. We have promptly notified CERT of these concerns,” Gupta stated in a thorough X post.

As scams on social media, especially on Telegram and WhatsApp, are on the rise, we’ve detected scammers executing fake CoinDCX schemes, attempting to gain your trust (example attached).

This isn’t just impacting @CoinDCX customers but also those who haven’t joined us yet.… pic.twitter.com/BDCvN0Ckn8

— Sumit Gupta (CoinDCX) (@smtgpt) November 28, 2023

Screenshots now emerging on X show potential victims complain about CoinDRX and not CoinDCX.

As you can clearly see! 👇

1) The user is talking about coindrx (not CoinDCX)
2) this is NOT CoinDCX App interface

So, the news article is misrepresented.

Most importantly, Let’s spread awareness to protect customers from such scams! We are committed to it as published here… https://t.co/UptV8tRMCH

— Sumit Gupta (CoinDCX) (@smtgpt) January 3, 2024

Delhi Police has not yet acknowledged or disputed that they will be looking into this cryptocurrency trading. On the same, more information is yet awaited.

This is what transpired:

According to an Indian Express article, CoinDCX was the subject of an investigation following many user complaints about the platform. The media outlet stated, citing information from the FIR, that a primary investigation into the matter has discovered a crime that is punishable by law. Victims are now being contacted to determine whether CoinDCX deceived its users by requesting a larger payment in full, from which it would withhold taxes and return the remaining amount before allowing them to withdraw their investments.

Users of the exchange who were concerned that they would fall prey to a financial scam started by the financially troubled exchange and spread through social media to India’s cryptocurrency industry.

CoinDCX’s CEO responded to the situation by saying, “We take any reports of fraudulent activity seriously and have actually been working with MeITY and the cyber cell on such matters.” Our excellent security team does thorough inspections and has recently discovered over 80 bogus websites/URLs posing as the CoinDCX exchange. As we have said before and want to emphasize once more, the security and safety of customer funds are our top objectives.”

The bewildering turn of events coincides with the government of India appearing to tighten its grip on cryptocurrency players, as the country is gradually announcing regulatory restrictions that these enterprises must follow.

The Prevention of Money Laundering Act (PML) Act of March 2023 brings virtual asset service providers (VASPs) in India under the purview of the Anti-Money Laundering and Counter-Financing of Terrorism (AML-CFT) framework. In order for their operations to be considered lawful in India, all crypto-related businesses have lately been instructed to register with the Financial Intelligence Unit (FIU).

Nine offshore VASPS have received show cause notifications from the FIU in accordance with Section 13 of the Prevention of Money Laundering Act (PMLA) as part of the compliance action against the offshore firms. Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex are some of these businesses.

In the meanwhile, the FIU has asked India’s IT ministry to restrict the URLs of the aforementioned businesses that are not abiding by the PML Act’s regulations and are conducting business illegally.