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HPZ Token scam: ED attaches assets worth 106.2 crore in India, Dubai

Dec 02, 2024 08:56 AM IST

The ED has attached assets worth ₹106.2 crore linked to a fraud scheme involving Chinese entities that promised investors high returns via a mobile app

MUMBAI: The Enforcement Directorate (ED) has provisionally attached the proceeds of crime in the form of movable and immovable assets belonging to several suspects, including Chinese-linked shell entities, accused of conning investors of hundreds of crores on the promise that their investments would get doubled through a mobile application, HPZ Token, online gaming and betting websites.

The Enforcement Directorate has provisionally attached the proceeds of crime in the form of movable and immovable assets belonging to several suspects. (Getty image)
The Enforcement Directorate has provisionally attached the proceeds of crime in the form of movable and immovable assets belonging to several suspects. (Getty image)

The attached assets, worth 106.2 crore, are located in India and Dubai. The agency undertook the action as part of its money-laundering investigation into allegedly fraudulent investment schemes operated through a cryptocurrency-based mobile app HPZ Token and online gaming and betting sites. The agency’s investigation revealed that for an investment of around 57,000, returns of 4,000 per day for three months had allegedly been promised to the investors.

In the initial period, returns were allegedly paid to gullible investors to secure their confidence, and at the same time lucrative offers of fresh investments were proposed to them to draw in further investments. Later, however, the funds collected were siphoned off and the app/website became inaccessible. The investors were allegedly promised lucrative returns on investments in mining Bitcoin and other crypto currencies via HPZ.

Bitcoin is a convertible virtual currency which is not legal tender in India. Its ‘mining’ refers to the method used by Bitcoin and other crypto-currencies to produce new coins and to examine new transactions.

The ED had in April last year carried out searches at three bank/payment gateway premises in Mumbai, Gurgaon and Bangalore, with respect to accounts held by accused entities in connection with the case’s probe. As part of its countrywide investigation related to the case, the agency had carried out searches at 44 locations throughout India, resulting in the freezing of bank account balances worth 176. 67 crore that were maintained by shell entities in various banks/virtual accounts. So far, the ED has frozen/ attached proceeds of crime worth 603.40 crore in the case.

The ED had initiated its investigation on the basis of a case registered by the Cyber Crime Police Station, Kohima, Nagaland, under various sections of the Indian Penal Code and Information Technology Act. The agency’s investigation has revealed the alleged role of 299 accused persons and entities, including 76 Chinese-controlled entities, 10 of whose directors are of Chinese origin, and two other entities controlled by other foreign nationals.

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