In a significant development, the Enforcement Directorate (ED) has taken a stringent stance against the perpetrators of the “HPZ Token and others” crypto scam, attaching proceeds of crime amounting to Rs. 278.71 Crore. The individuals and shell entities targeted by this action, including those with Chinese links, are implicated in defrauding investors of hundreds of crores.
Genesis of the Investigation:
The ED’s investigation gained momentum following a First Information Report (FIR) registered by the Cyber Crime Police Station in Kohima, Nagaland. The case involves duping unsuspecting investors with promises of astronomical returns through an app-based token called “HPZ Token.” Investors were lured into investing money for purported Bitcoin and cryptocurrency mining operations.
Modus Operandi of the Perpetrators:
The ED’s investigation brought to light the intricate web woven by shell entities, employing dummy directors and proprietors to open various bank accounts and merchant IDs. These were strategically utilized for the rotation and layering of proceeds of crime, representing funds obtained through illegal online gaming, betting, and fraudulent investments in Bitcoin mining.
Investors were enticed with promises of substantial returns, with one instance citing a return of Rs. 4,000 per day for three months against an investment of Rs. 57,000. However, the reality revealed a different story, as the promised returns were paid only once, followed by a continuous solicitation for fresh funds.
Continued Vigilance by the ED:
This recent action of attaching proceeds of crime is part of the ED’s persistent efforts in the case. Earlier search operations, spanning 44 locations across the country, led to the freezing of Rs. 176.67 Crore maintained by shell entities in various banks and virtual accounts. The cumulative restrained proceeds of crime in this case now stand at an imposing Rs. 455.37 Crore.
A Strong Message Against Financial Fraud:
The ED’s relentless pursuit in this crypto scam case sends a strong message against financial fraud, particularly in the evolving landscape of cryptocurrency-related offenses. The crackdown underscores the government’s commitment to curbing illegal activities in the digital financial space and protecting investors from fraudulent schemes.
As investigations progress and enforcement actions continue, this case serves as a testament to the vigilance required in the dynamic realm of cryptocurrency and digital investments. The ED’s proactive measures aim to safeguard the interests of investors and maintain the integrity of financial systems against illicit activities.
