The Enforcement Directorate, a financial investigative agency, took control of assets valued at around Rs 55.36 crore connected to the HPZ app-based token scam case, which is also linked to a multi-crore Bitcoin investment scam in Hyderabad. This asset seizure is part of the ongoing inquiry into the misuse of the HPZ app-based token.
The fraudulent activities also extended to deceptive investments in online gaming and betting. The investigation has now revealed a more extensive conspiracy involving multiple entities and Chinese organizations in a fraud case.
These assets that have been attached primarily consist of funds held in bank accounts and merchant IDs associated with various shell companies and Chinese-linked entities. These accounts were utilized to facilitate funds related to illegal online gaming, betting activities, and investments in Bitcoin mining.
The HPZ token is an app-based cryptocurrency that lured users with the promise of substantial profits through investments in Bitcoin and other cryptocurrencies using mining machines.
The ED's actions come after its previous decision to freeze the assets of HPZ. Back in April this year, the ED had frozen Rs 91.6 crore held in various bank accounts owned by entities controlled by Bhupesh Arora and his associates. They were accused of misusing the app-based token to operate illicit gaming apps and websites.
Subsequently, the ED ordered the freezing of these assets, initially seized under Section 17 of the Prevention of Money Laundering Act (PMLA).
The ED's investigation began following the filing of a First Information Report (FIR) by the Cyber Crime Police Station in Nagaland's capital. According to the FIR, the fraudsters used a scheme to persuade victims to invest in the HPZ app-based token, promising exceptionally high returns on their Bitcoin mining investments.
Investors were guaranteed profits, with an investment of Rs 57,000 supposedly yielding Rs 4,000 per day for three months. However, often, the promised returns were paid only once, after which, additional funds were solicited from the victims.
The ED has conducted nationwide searches at 26 locations in 2022 and 18 locations in 2023 as part of its investigation.
In total, the agency has frozen assets related to HPZ worth approximately Rs 176.67 crore, and authorities are continuing to investigate the full extent of the alleged financial misconduct.
