Eight payment gateways, including Paytm, RazorPay, PayU, and Easebuzz, have come under the Enforcement Directorate (ED) scanner in connection with a ₹2,200 crore raised across 20 states and linked to 10 Chinese nationals in a cryptocurrency scam.
Chinese nationals were allegedly operating one of the biggest cryptocurrency scams from India, HPZ Token, The Times of India reported.
Modus Operandi
More than ₹2,200 crore was allegedly collected by the accused from 20 states in the country. The ‘proceeds of the crime’ were remitted out of the country, and a part of this amount was frozen in the payment gateways while being routed to beneficiaries. The amount stayed in the payment gateway till a day or two when bulk payments were made. It is during this process, the ED froze ₹500 crore.
The ED is currently probing the matter by tracking the flow of funds and checking whether payment gateways have created suspicious transaction reports (STR). The agency has also alerted the Reserve Bank of India (RBI) and the Financial Intelligence Unit (FIU). It is mandatory for all financial institutions to prepare STR and submit it to RBI periodically. The central bank forwards this report to FIU for enforcement agencies to probe further.
Gateways and amounts
Out of the total amount frozen by the ED, the highest belonged to PayU at ₹130 crore, followed by Easebuzz at ₹33.4 crore, Razorpay at ₹18 crore, while Cashfree and Paytm had ₹10.6 crore and ₹2.8 crore respectively, as alleged proceeds of crime related to HPZ token scam, the report said.
The other payment gateways in connection to the case include WunderBaked, AgreePay and SpeedPay.
What is the scam about?
The accused operated the scam across 20 states by giving people the option to invest in the mining of cryptocurrencies, including Bitcoins, via the HPZ token mobile app. There are more than 50 companies registered in Delhi with 84 bank accounts, 37 bank accounts and 26 companies in Karnataka, while 19 companies in Haryana and 11 in Uttar Pradesh. The scamsters operated from Maharashtra, Gujarat, Andhra Pradesh, Telangana, Tamil Nadu, West Bengal and other states.