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India’s Enforcement Directorate (ED) has frozen around 916 million from bank accounts linked to companies involved in the HPZ token scam.
According to authorities, the amount was seized after multiple raids conducted simultaneously in Mumbai, Gurugram, and Bengaluru.
The HPZ Token Scam
According to the Enforcement Directorate, the HPZ token was an app-based token promising users substantial gains by investing in mining hardware for various cryptocurrencies, including Bitcoin. The case was investigated based on an FIR (First Information Report) registered by the Cyber Crime Police Station, located in Kohima, Nagaland. Over the course of the investigation, authorities discovered a much larger conspiracy that involved a number of entities, all involved with money laundering.
In connection with the fraud, authorities have frozen around 916 million, located in various bank accounts associated with companies engaged in the fraud. However, sources within the Enforcement Directorate, the bank, or payment gateway companies are themselves not being investigated. However, their premises were searched so that authorities could gather information regarding suspicious accounts maintained by the companies accused in the scam.
The ED Investigation
Investigation into the scam by the Enforcement Directorate revealed that Shigoo Technology Private Limited and Lillian Technocab Pvt. Ltd collected funds from investors under the guise of HPZ tokens. Upon further investigation, authorities discovered that Bhupesh Arora and some of his associates had control of Shigoo Technology Private Limited. Arora was involved in the operation of unregistered gaming websites and apps and was swindling gullible individuals through these apps and websites and collecting money. With the current freeze, the total funds frozen during the course of the investigation stands at 178 Crore. The Enforcement Directorate stated in a press release,
“The previous week’s search was conducted] in respect of the accounts held by the entities controlled by Bhupesh Arora and his associates in connection with an investigation relating to the misuse of an App-based token named ‘HPZ’ and other similar applications by several entities.”
India’s Uneasy Relationship With Crypto
India has been relatively skeptical when it comes to crypto, with the Reserve Bank of India firmly against cryptocurrencies. In fact, Reserve Bank of India Governor Shaktikanta Das said that the banking crisis unfolding in the United States of America highlights the risk crypto poses to the traditional financial system. The country’s finance minister, Nirmala Sitharaman, has repeatedly stated that crypto regulation needs global consensus to be effective—a point she reiterated just a couple of days ago. India has also introduced money laundering provisions to govern the crypto sector. The move comes as the country’s latest measure to tighten its oversight of digital assets operating in the country.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.