The Enforcement Directorate (ED) has frozen about INR 500 Cr kept in virtual accounts of Paytm, Razorpay, PayU, Easebuzz and four other payment gateways
The move is part of an ongoing investigation into a crypto scam worth INR 2,200 Cr linked to HPZ Token app
Investors across 20 states were duped on the pretext of high returns on investment in mining of cryptocurrencies, including bitcoins
The Enforcement Directorate (ED) has frozen about INR 500 Cr kept in virtual accounts of Paytm, Razorpay, PayU, Easebuzz and four other payment gateways over the last two years in connection with an ongoing probe into the crypto scam linked to HPZ Token app.
Through the pan-India scheme spanning 20 states, fraudsters duped the public of INR 2,200 Cr on the false promise of phenomenal returns on investment for mining cryptocurrencies, including bitcoins, through HPZ Token app, The Times of India reported.
These funds were being illegally transferred out of India by some Chinese nationals, a part of which was seized by ED. The proceeds remained with the gateways for a day or two during which ED seized around INR 500 Cr, as per the report.
Inc42 couldn’t independently verify the report.
Of the alleged “proceeds of crime” linked to the HPZ Token scam, ED froze INR 130 Cr in virtual accounts held with PayU, followed by INR 33.4 Cr with Easebuzz, INR 18 Cr with Razorpay, INR 10.6 Cr with CashFree and INR 2.8 Cr with Paytm.
Other payment gateways currently being investigated by ED include WunderBaked, AgreePay and SpeedPay.
ED launched a money laundering probe into the matter based on a first information report (FIR) filed by the cyber crime police of Nagaland’s Kohima in October 2021 against the HPZ Token app and others linked to the scam.
An investigation by the ED sleuths revealed that some China-linked entities entered into service agreements with several NBFCs and were allegedly operating multiple suspicious online lending apps such as Cashhome, Cashmart and easyloan.
These apps were then used to rotate and layer the funds fraudulently received for illegal online gaming, betting and investments for Bitcoin mining.
The app promised returns of as much as INR 4,000 per day for three months on an investment of INR 57,000.
As of May 2024, the ED had frozen assets worth INR 177 Cr, including INR 56 Cr in bank accounts held by various shell and Chinese linked entities in connection with the HPZ Token scam case.
In October last year, actor Tamannaah Bhatia was grilled by ED for hours in connection with the HPZ Token scam scame. The actor has made a “celebrity appearance” at an event of the company in exchange for cash.
The development comes as ED intensifies its crackdown against China-linked digital lending apps for alleged violations of the country’s money laundering and foreign exchange management laws.
In the previous such instance, the agency raided offices of fintech players of Paytm, Razorpay, Easebuzz, Cashfree Payments India, among others.
Last year, Saurabh Chandrakar, the alleged kingpin in the scam linked to online betting platform Mahadev Book, was arrested in the UAE on money laundering charges. Hacked crypto exchange WazirX is also currently under investigation by multiple government agencies, including the Financial Intelligence Unit and Intelligence Bureau, in connection with a $235 Mn hack it suffered last year.