Eight payment gateways, including Razorpay, PayU, Easebuzz and Paytm, are under investigation by the Enforcement Directorate (ED), which has frozen around Rs 500 crore in their virtual accounts over the past two years. This action is linked to one of India’s largest cryptocurrency scams involving 10 Chinese nationals operating the HPZ Token scheme, according to a Times of India report.
The scam reportedly amassed over Rs 2,200 crore from individuals across 20 states. The funds, considered “proceeds of crime”, were transferred abroad, but Rs 500 crore was frozen by the ED while in the custody of payment gateways during bulk transactions. Investigations are ongoing to trace the money trail and determine whether the payment gateways generated Suspicious Transaction Reports (STRs) as required, alerting the Reserve Bank of India (RBI) and the Financial Intelligence Unit (FIU). STRs are mandated for financial institutions to ensure further scrutiny by enforcement agencies.
However, Paytm has denied any notice from ED about the matter. A press release from One97 Communications read, “We confirm that we have not received any such new notice, communication, or query from the Enforcement Directorate regarding the matter mentioned in the media articles. The information published is factually incorrect and misleading and we had not received any query from the media prior to the publishing of this news article.”
Razorpay also refuted the report and called it “misleading”. “The recent news reports suggesting Razorpay is under scrutiny by the Enforcement Directorate (ED) are factually inaccurate and misleading. We have not received any new notices, communications, or inquiries from the ED related to the issues referenced in these articles. Furthermore, we were not approached by the media for comment before the publication of these reports. As a responsible and compliant corporate entity, we want to reiterate the fact that Razorpay has and will continue to hold ourselves to the highest level of governance and conduct.”
In an official statement, Easebuzz said, “We would like to clarify that the investigation by the Enforcement Directorate concerning the highlighted matter has no direct connection to Easebuzz. The matter in relation to HPZ token is 2-3 years old and there are no pending queries at Easebuzz end from the authorities. Additionally, we have not received any communication from the authorities regarding this case. Furthermore, we wish to emphasize that Easebuzz has consistently provided all necessary information to the relevant authorities as and when requested, and we have been commended by the authorities for our cooperation. Easebuzz is a highly compliant and secure payments platform, and we remain committed to operate in full compliance with all existing regulations.”
Of the Rs 497 crore frozen, PayU held the largest amount at Rs 130 crore, followed by Easebuzz (Rs 33.4 crore), Razorpay (Rs 18 crore), CashFree (Rs 10.6 crore), and Paytm (Rs 2.8 crore). Additional funds were frozen in accounts linked to WunderBaked, AgreePay, and SpeedPay.
The accused allegedly ran a nationwide operation, registering over 100 companies in at least 20 states, with Delhi alone hosting over 50 firms tied to 84 bank accounts. Investors were lured through the HPZ Token mobile app, which promised cryptocurrency mining opportunities, including Bitcoin.
A PMLA court in Nagaland recently declared Bhupesh Arora, a Delhi resident, a fugitive economic offender after he fled to Dubai in 2022 despite a non-bailable warrant. The ED has filed a chargesheet implicating 298 individuals in the scam.
