The ED is investigating Paytm and Razorpay for links to a ₹2,200 crore Chinese cryptocurrency scam.

The ED is looking into eight payment gateways, including Paytm and RazorPay, for blocking around ₹500 crore connected to a cryptocurrency scam that included Chinese citizens. Over ₹2,200 crore is said to have been collected by the fraud in 20 Indian states.

In the past two years, eight payment gateways—Paytm, RazorPay, PayU, and Easebuzz—have been under investigation by the Enforcement Directorate (ED) for freezing around ₹500 crore in the virtual accounts of ten Chinese people.

The Times of India reported that one of the largest cryptocurrency scams from India, HPZ Token, was purportedly run by Chinese nationals.

The accused allegedly collected over ₹2,200 crore from 20 states across the nation. Before being distributed to beneficiaries, a portion of the "proceeds of the crime" that were sent abroad were frozen at the payment channel. When bulk payments were made, the money remained in the payment gateway for a day or two. The ED froze ₹500 crore during this procedure.

By monitoring the money movement and determining whether payment gateways have generated suspicious transaction reports (STR), the ED is presently looking into the situation. Additionally, the agency has notified the Financial Intelligence Unit (FIU) and the Reserve Bank of India (RBI). All financial institutions are required to compile and report STR.

Out of the total amount frozen by the ED, the highest belonged to PayU at ₹130 crore, followed by Easebuzz at ₹33.4 crore, Razorpay at ₹18 crore, while Cashfree and Paytm had ₹10.6 crore and ₹2.8 crore respectively, as alleged proceeds of crime related to HPZ token scam, the report said.

WunderBaked, AgreePay, and SpeedPay are among the other payment gateways involved in the case.

What is the purpose of the scam?
By offering investors the chance to engage in cryptocurrency mining, including Bitcoin mining, through the HPZ token mobile app, the accused ran the scam throughout 20 states. There are almost 50 firms with 84 bank accounts registered in Delhi, along with 26 companies in Karnataka, 19 in Haryana, and 11 in Uttar Pradesh. In addition to these states, the fraud was active in Bangladesh, Maharashtra, Gujarat, Andhra Pradesh, Telangana, and Tamil Nadu.