2200 Crore Cryptocurrency Scam: The Enforcement Directorate (ED) is probing eight payment gateways, including Paytm, Razorpay, PayU, and Easebuzz, in connection with a cryptocurrency scam involving Chinese nationals. The scam, linked to the HPZ Token app, allegedly siphoned off over ₹2,200 crore from unsuspecting investors across 20 Indian states over two years.
The operation would make it be among the biggest cryptocurrency scams reported in India. Among those accused are 10 Chinese nationals, who, through the HPZ Token app, promised interested individuals high returns when investing in cryptocurrency mining, including Bitcoin.
This meant that the funds gathered from investors passed through various payment gateways to be eventually wired into overseas accounts of beneficiaries. Large portions of those funds were held for a day or two in the gateways before bulk payments were processed.
During the investigation, the ED froze assets worth ₹500 crore in the payment gateways. The agency is now scrutinizing the flow of funds and determining whether the gateways adhered to mandatory compliance, including the creation of Suspicious Transaction Reports (STR).
As part of the probe, the ED has frozen funds linked to several payment gateways. The details are as follows:
- PayU: ₹130 crore
- Easebuzz: ₹33.4 crore
- Razorpay: ₹18 crore
- Cashfree: ₹10.6 crore
- Paytm: ₹2.8 crore
Gateways other than these have also been found to be used by fraudsters. The scam covered 20 states in the country – Maharashtra, Gujarat, Andhra Pradesh, Telangana, Tamil Nadu, West Bengal, Haryana, and Uttar Pradesh. A vast network of companies and accounts has been found to have been used to launder the money.
The key findings are:
- 50 companies in Delhi, with 84 bank accounts.
- 37 bank accounts and 26 companies in Karnataka.
- 19 companies in Haryana and 11 in Uttar Pradesh.
The ED has alerted the Reserve Bank of India (RBI) and the Financial Intelligence Unit (FIU). Financial institutions are mandated to submit STRs to the RBI, which are then forwarded to the FIU for further scrutiny.
The case clearly underlines the vulnerabilities of India’s financial ecosystem to sophisticated scams. In a global world where cryptocurrency fraud is on the rise, this points towards more tough regulatory oversight and public awareness that can prevent such scams.
The ED probe continues, and further details are awaited as investigators trace the remaining funds and identify all those involved in the scam.
Updates to follow.
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