Payment gateways under ED scrutiny over crypto scam: Report

The Enforcement Directorate’s two-year-long investigation into nine payment gateways, including PayU and Paytm, has resulted in freezing Rs 500 crore in virtual accounts of these companies, The Times of India reported.

This probe is linked to a cryptocurrency scam, HPZ Token, allegedly operated by 10 Chinese nationals from India. People were given the option to invest in cryptocurrencies, including Bitcoin, through the mobile app HPZ Token.

The accused have allegedly scammed customers out of Rs 2,200 crore across 20 states in India and transferred the proceeds out of India. According to the TOI report, as a part of the investigation, around Rs 500 crore was frozen by the law enforcement agencies with these payment gateways.


Industry insiders told ET that most of the disputed funds have been settled over the last year by the payment gateways.

The government agency is checking if the payment gateways flagged the suspicious transactions and alerted the central bank and the Financial Intelligence Unit (FIU), the TOI report said.

Responding to the development, an Easebuzz spokesperson said: “The matter in relation to the HPZ token is two to three years old, and there are no pending queries at Easebuzz end from the authorities. Additionally, we have not received any communication from the authorities regarding this case.”

One97 Communications, which operates Paytm, informed the stock exchanges today that the company has not received any communication from the ED regarding this matter recently and referred to its filings back in 2022 when it had faced investigations by the ED regarding issues with some of its merchants.

“We confirm that we had fully cooperated with the authorities and had complied with all their directives,” it said in the statement.

Shares of One97 Communications, which operates payments platform Paytm, fell by up to 9% to a day's low of Rs 773.90 on Friday after the report emerged.