The Enforcement Directorate on Friday said it has frozen around Rs 46.67 crore in various banks in connection with a money-laundering case involving HPZ Token app.
The app allegedly promised large gains to users by investing their money in mining machines for bitcoin and other cryptocurrencies.
The development came after the agency conducted a search operation at six business and residential premises in Delhi, Ghaziabad, Mumbai, Lucknow and Gaya in connection with the case. The money was kept in various bank accounts, including virtual ones, of payment platforms Razorpay, Cashfree, Easebuzz and Paytm.
“During the search, various incriminating documents have been recovered and seized,” the Enforcement Directorate said in a statement. “[About] Rs 33.36 crore was found with Easebuzz Private Limited, Rs 8.21 crore with Razorpay Software Private Limited, Rs 1.28 crore with Cashfree Payments India Private Limited, Bangalore, and Rs 1.11 crore with Paytm Payments Services Limited.”
The agency said the app would lure users by promising to double their investments. The app allegedly paid back some money to the investors and transferred the remaining amount to banks from where it was siphoned off in digital currencies.
“After that, the fraudsters stopped the payments and the website became inaccessible,” the agency said.
The Enforcement Directorate’s case against the HPZ app is based on a first information report filed on November 8 by the Cyber Crime Police Station in Nagaland’s Kohima.
The app was operated by Gurugram-based Lillion Technocab and Shigoo Technology Private Limited, according to the agency.
“M/s Shigoo Technology Private Limited was also found linked to various Chinese-controlled companies,” the agency said. “It was also revealed that various other companies were indulged in receiving funds from public on pretext of operating various apps/websites for gaming/loan/others.”
Friday’s development came two weeks after the Enforcement Directorate conducted raids at the Bengaluru offices of payment platforms Razorpay, Cashfree and Paytm as part of an investigation into illegal phone-based loan apps operated or controlled by Chinese individuals.
The raids, which started on September 2, were conducted at six locations in the city under the provisions of the Prevention of Money Laundering Act. The perpetrators allegedly extorted and harassed users who took small loans through mobile apps run by them.
Payment gateways deny wrongdoing
Meanwhile, payment gateway Easebuzz and Cashfree denied any wrongdoings in the case and assured they would cooperate with the Enforcement Directorate in their investigation, The Indian Express reported.
“We, at Easebuzz, would like to clarify that none of the parties mentioned in the ED’s statement belonged to our merchant base,” a spokesperson said.
He added: “The mentioned entities by authorities were only the counterparties of the merchant, who was using our payment gateway and this merchant had been proactively identified and blocked by us much before the investigation had started, as per our internal risk and compliance process.”
A spokesperson for Cashfree said their company fully complies with the existing regulations, according to the newspaper.
“We continue to extend our diligent co-operation to the ED operations,” the spokesperson added. “We were able to provide the required and necessary information within a few hours on the day of enquiry.”
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