Mumbai: Stepping up its action on illegal Chinese digital lending apps for allegedly flouting money laundering and foreign exchange management laws, the Enforcement Directorate (ED) freezed ₹91.3 crore of digital app-based HPZ Token linked with crypto and loan apps.
The frozen amount belonged to various Chinese-controlled entities that lured users with promises of high returns on their crypto investments. A total of ₹178 crore has been frozen in the case.
ED had carried out searches earlier at the premises of three banks and payment gateways in Mumbai, Gurugram and Banglore leading to seizure ₹46.67 crore in money laundering probe into HPZ Token app case.
In September 2022, the federal agency had searched 16 locations of banks, payment gateway branches and offices in Delhi, Gurugram, Mumbai, Pune, Chennai, Hyderabad, Jaipur, Jodhpur and Bengaluru based on a FIR registered by the Cyber Crime Police of Nagaland’s Kohima.
Why this matters?
The FIR alleged that the victims were lured into undertaking investments on the pretext of doubling their money via mobile apps and payments were received through UPIs and various other gateways. “Some amounts were paid back to the investors and the remaining diverted to various individual and company accounts, while a part of the funds was siphoned off in the form of digital/virtual currencies. The fraudsters later stopped the payments and the website became inaccessible,” said Nagaland Police Cyber Crime official.
The money trial
ED sleuths followed the money trial and detected ₹33.36 crore that was lying with the Easebuzz Private Limited in Pune, ₹8.21 crore with Razorpay Software in Bengaluru, ₹1.28 crore with Cashfree Payments in Bengaluru and ₹1.11 crore with Paytm Payments in Delhi.
The dubious apps, operated allegedly by Lillion Technocab and Shigoo Technology Private Limited, were linked to various Chinese-controlled companies receiving funds from the public on the pretext of operating various apps, websites for gaming and loans.
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