The Directorate of Enforcement (ED) has taken possession of movable properties to the tune of Rs.55.36 Crore (Approx.) in the form of balances available in the bank accounts and Merchant IDs held by various Shell and Chinese linked entities, in the case of HPZ Token and Others. ED, after freezing, had filed an Original Application (O.A.) before the Ld. Adjudicating Authority, New Delhi. Thereafter, Ld. Adjudicating Authority, New Delhi under the provision of Section 8 of the Prevention of Money Laundering Act (PMLA), 2002, upheld the freezing order issued by ED and allowed the retention of properties frozen under Section 17 of PMLA.
The ED started an investigation based on an FIR filed by the Cyber Crime Police Station in Kohima, Nagaland, under the Information Technology Act and various IPC sections regarding the deception of thousands of gullible investors under the pretence of promising them astronomical returns on their investments for Bitcoin mining. The fraudsters’ strategy was to entice their victims into making investments in the business on the false pretence that the HPZ Token app would allow them to double their money. Similar to that, investments in online gambling and gaming were also obtained fraudulently.
According to an investigation by the ED, numerous bank accounts and merchant identification numbers were opened by various shell companies with fictitious directors and owners solely for the purpose of layering and rotating the proceeds of crime, which are money obtained fraudulently for illegal online gambling and gaming as well as investments in Bitcoin mining. Returns of Rs. 4,000 per day for three months were promised for an investment of Rs. 57,000, but only one payment was made before new money was needed. In this instance, the ED carried out national searches at 26 sites in 2022 and 18 locations in 2023 and has thus far frozen sums totalling about Rs. 176.67 crore. Further research is now being conducted.
