New Delhi: Tightening the noose on illegal crypto transactions and cyptocurrency firms with suspicious dealings and alleged links with Chinese loan Apps, the Enforcement Directorate (ED) has mounted its search operations across many cities.

The ED team on Friday conducted searches at 6 business/residential premises in Delhi, Ghaziabad, Mumbai, Lucknow, Gaya and 16 other premises of Banks/Payment Gateways branches/offices in Delhi, Gurgaon, Mumbai, Pune, Chennai, Hyderabad, Jaipur, Jodhpur and Bangalore in connection with probe related to App-based token named HPZ and related entities.

The suspicious crypto firm is the latest to fall under ED lens because of alleged links with Chinese loan Apps. It is being probed for alleged money laundering. A case was filed against it earlier this year, which claimed that the firm issues HPZ token and collected crores of rupees. It said that funds will be used to mine cryptocurrencies but they didn’t happen.

It may be noted that several other crypto exchanges are under ED net under money laundering charges. They include CoinDCX, CoinSwitch Kuber, WazirX.

What is HPZ Token & its ‘web of deceit’

The HPZ Token was an App-Based Token which promised users of large gains against investment by investing in mining machines for Bitcoin and other cryptocurrencies. The modus-operandi of the fraudsters was to first lure the victims to invest in the company on the pretext of doubling their investment through the app HPZ Token. Payments were received from users through UPIs and other various payment gateways/nodal accounts/individuals. Part-amount was paid back to the investors and remaining amount was diverted to various individual and company accounts through various Payment gateways/Banks from where partly it was siphoned off in digital/virtual currencies. After that, the fraudsters stopped the payments and the website became inaccessible.

Investigation revealed that the HPZ token was operated by M/s Lillion Technocab Private Ltd and M/s Shigoo Technology Private Limited. M/s Shigoo Technology Private Limited was also found linked to various Chinese controlled companies. 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. ED suspected involvement of M/s Jilian Consultants India Pvt Ltd, Gurugram behind various companies involved in these frauds.

One such entity, M/s Mad-Elephant Network Technology Private Limited in agreement with X10 Financial Services Limited was operating various loan Apps (Yo-Yo cash, Tufan Rupees, Coco cash etc.). Similarly, Su Hui Technology Private Limited, in agreement with M/s Nimisha Finance India Private Limited had operated Loan Apps.

During the search, various incriminating documents have been recovered and seized. Huge balances were found to be maintained in the virtual accounts of the involved entities with payment aggregators. Rs. 33.36 Crore was found with Easebuzz Private Limited, Pune, Rs. 8.21 Crore with Razorpay Software Private Limited, Bangalore, Rs. 1.28 Crore with Cashfree Payments India Private Limited, Bangalore and Rs. 1.11 Crore with Paytm Payments Services Limited, New Delhi. Total amount of around Rs. 46.67 Crore was detected and freezed in various bank accounts and virtual accounts.