India’s financial watchdog, the Enforcement Directorate (ED), seized $1.2 million in an investigation into a fraud scheme based on an app-based token, HPZ. According to an official press release published on September 29, several apps offered users to buy the HPZ tokens for higher returns. And investigations revealed that “Chinese-controlled entities” were behind the scam.
Cryptocurrency has seen widespread adoption in recent years. And as digital assets became the main source of exchange in everyday life, it opened a way for scammers to trick people and wipe their money anonymously in crypto. Consequently, the growing number of crypto scams and fraud activities awakened global law enforcement agencies to protect users and fight illegal operators.
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The FIR, lodged in October 2021 at the cyber crime police station in Kohima, Nagaland, triggered investigations into the accused app by India’s financial watchdog ED. The victims of the complaints cited that the HPZ token app and other similar apps cheated investors of their hard-earned money.
In addition, ED’s probe uncovered several organizations in China that were connected to HPZ token scams and operated them with multiple applications. The companies, according to the authority, include Larting Private Limited, Mobicred Technology Private Limited, Magic Data Technology Private Limited, Acepearl Services Private Limited, Aliyeye Network Technology India Pvt Ltd, Comein Network Technology Private Limited, Wecash Technology Private Limited, Magic Bird Technology Private. Limited and Baitu Technology Private Limited.
As always, scammers claimed a higher return on investment (ROI) to users and pretended that investing in HPZ tokens is similar to investing in mining machines for Bitcoin and other cryptocurrencies.
India’s Enforcement Directorate (ED) continues to crack down on crypto scams
Also, the apps used to cheat the general public out of their money were named Cashhome, Cashmart and easyloan. In particular, the suspicious companies had established service agreements with some non-banking financial companies to proceed with money transfers and even offered loan services that operated on these fake apps, according to the report.
Later that day, on September 30, the law enforcement agency reported another freeze of digital assets worth about $58,354 on Indian crypto exchange WazirX. The seizure of funds by the authority comes against an alleged money-laundering game app, E-Nuggets. The agency filed charges against E-Nuggets, its boss Aamir Khan and other successors. It pooled user funds in the stablecoin, Tether, whose value is pegged to the dollar, and WazirX’s utility tokens, WRX.
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The latest seizure of E-Nuggets’ funds comes after the ED seized a whopping $1.2 million in Bitcoins earlier. The agency then expressed that the app was designed to launder money and stopped the withdrawals after collecting a large amount of funds. Investigations found that some of E-nuggets’ profits were diverted to overseas accounts. Scammers initially used WazirX to convert illegal money into crypto and then transferred funds to Binance.
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