Payment gateways under probe as ED freezes Rs 500 crore in crypto scam

The scam was allegedly orchestrated by a group of 10 Chinese nationals who established companies in various Indian states, including Karnataka, Haryana, and Maharashtra

The Enforcement Directorate (ED) has frozen Rs 500 crore in virtual accounts linked to prominent payment gateways, including Razorpay, PayU, Easebuzz, and Paytm, as part of its probe into the HPZ Token cryptocurrency scam. The scam, masterminded by Chinese nationals, defrauded investors across 20 states in India of over Rs 2,200 crore. Victims were encouraged to invest in cryptocurrency mining through the HPZ Token app, which promised high returns.

The ED’s swift action to freeze the funds prevented them from being transferred abroad. Bulk payments made during the scam were temporarily held in the payment gateways, providing the ED an opportunity to intervene before the funds could be dispersed to international beneficiaries.

Razorpay, one of the gateways involved, denied any recent communication from the ED and emphasized that it adheres to regulatory standards and governance practices.

ED traces financial trail in scam

The scam was allegedly orchestrated by a group of 10 Chinese nationals who established companies in various Indian states, including Karnataka, Haryana, and Maharashtra. These companies used multiple bank accounts in Delhi, Karnataka, and Haryana to conduct fraudulent activities, and the ED is currently tracing the financial trail.

The ED’s investigation also focuses on whether the payment gateways filed Suspicious Transaction Reports (STRs) with the Reserve Bank of India (RBI) and the Financial Intelligence Unit (FIU). The investigation was sparked by a case filed by cybercrime police in Kohima, Nagaland. Meanwhile, a PMLA court has declared Bhupesh Arora, a Delhi resident, and his associates as fugitives for evading arrest despite non-bailable warrants.

As the investigation continues, authorities are working to uncover the full extent of the scam, seize assets, and recover the defrauded funds, while also verifying whether the payment gateways played a role in facilitating the illicit transfers.