Shares of One97 Communication, the parent company of Paytm, fell as much as 9% to an intraday low of Rs 773.90 following news that the Enforcement Directorate of India (ED) is investigating Paytm in connection with a cryptocurrency scam. The ED is also examining several payment apps, including Razorpay, PayU, Easebuzz, and five other payment gateways.
As reported by the Economic Times , the ED has frozen approximately Rs 500 crore in virtual accounts related to these payment apps over the past two years, as part of an investigation into a scam involving ten Chinese nationals and the HPZ Token cryptocurrency. The accused are charged to have collected over Rs 2,200 crore from investors across 20 states and transferred part of the ‘proceeds of crime’ out of India.
A part of these funds was frozen with the payment gateways before being sent to the beneficiaries.
During this process of making the extent amount of payments, the amounts remained with the payment gateways for a day or two, during which the ED froze around Rs 500 crore. Of the total Rs 497 crore that was frozen in the virtual accounts of various payment gateways, PayU had the largest share, with Rs 130 crore related to the alleged HPZ Token scam.
While, the other amounts included Rs 33.4 crore with Easebuzz, Rs 18 crore with Razorpay, Rs 10.6 crore with CashFree, and Rs 2.8 crore with Paytm. The scammers have established companies in at least 20 states across India and attracted investors by offering opportunities to invest in cryptocurrency mining, including Bitcoin, through the HPZ Token mobile app.
More than 50 companies were registered in Delhi with 84 bank accounts, alongside 26 firms in Karnataka with 37 bank accounts, 19 in Haryana, and 11 in Uttar Pradesh. Other states involved included Maharashtra, Gujarat, Andhra Pradesh, Telangana, Tamil Nadu, and West Bengal.
In response to the reports, Paytm stated that the investigation pertains to earlier inquiries regarding third-party merchants. “We would like to clarify that these merchants are independent entities and are not part of our group. We confirm that we have fully cooperated with the authorities and complied with all their directives,” the company said.
However, The company also mentioned that they had not received any new notice or communication from the ED and labelled the reports as “factually incorrect and misleading.”
