The HPZ Token scam, in which eight payment gateways, including Paytm, PayU, and Razorpay, have been under the Enforcement Directorate’s (ED) scanner as per a report by The Times of India, is said to have started with the launch of the ‘HPZ Token’ mobile app. The app-based token promised investors humongous gains by investing in mining machines for Bitcoin and other cryptocurrencies.
Specifically, for an investment of Rs 57,000, returns of Rs 4,000 per day were promised over three months.
Financialexpress.com couldn’t independently verify the report of payment gateways under the ED scanner.
Initially, investors were paid their promised returns. This created a lot of trust which encouraged them to invest further. Later, the money siphoned from the investors was diverted to different shell companies, many with alleged Chinese connections.
These shell companies were located in different states in India, such as Delhi, Karnataka, Haryana, Uttar Pradesh, Maharashtra, Gujarat, Andhra Pradesh, Telangana, Tamil Nadu, and West Bengal.
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The ED found that several payment gateways, including Razorpay, PayU, Easebuzz, and Paytm, were being used to facilitate transactions for the HPZ Token app, according to the report. These payment gateways reportedly processed huge sums of money, of which the ED froze Rs 500 crore during the investigation.
The frozen amount included Rs 130 crore for PayU, Rs 33.4 crore for Easebuzz, Rs 18 crore for Razorpay, Rs 10.6 crore for CashFree, and Rs 2.8 crore for Paytm, the report said. Other platforms allegedly involved were WunderBaked, AgreePay, and SpeedPay.
The scam came to the fore in 2021 with the Cyber Crime Police Station in Kohima, Nagaland, lodging a case against the operators of the scheme, thus laying a foundation for ED investigation.
From the investigation process, it was gathered that the accused had collected more than Rs 2,200 crore of funds from various investors across 20 states and also remitted portions of the funds outside India.
The agency had provisionally attached movable and immovable properties worth Rs 106.20 crore in India and Dubai, linked to the scam. These properties included assets of multiple individuals and shell entities involved in the scam.
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