HPZ Token Scam: Fintechs Refute Claims of Account Freezing and ED Probes

Prominent fintech companies, such as Paytm and PayU, have refuted claims that they are one of a few payment gateways under investigation by the Enforcement Directorate (ED) in connection with a cryptocurrency scam.
In response to the account freezing reports, Paytm denied receiving any notice of this kind from the Enforcement Directorate. The company also confirmed that it has not received any new notices, communications, or enquiries from the Enforcement Directorate about the subject matter covered in the media articles. The published material is misleading and factually inaccurate, as per Paytm.
Paytm went on to explain that the cases being covered by the media right now are related to similar previous enquiries about third-party merchants. Furthermore, it stated that Paytm would want to make it clear that these merchants are separate businesses and are not affiliated with its organisation. It attested to the company's complete cooperation with the authorities and compliance with all of their directives, Paytm continued.
In response to the reports, PayU also said that it strongly rejects any misrepresentations and that there are factual errors in the reports about PayU. PayU has consistently upheld the highest standards of governance and transparency in all of our activities and has remained dedicated to abiding by all applicable laws and regulations.
ED Reportedly Frozen INR 500Cr
A renowned media house has reported that the ED had frozen about INR 500 crore in virtual accounts of eight payment gateways, including Razorpay, PayU, Easebuzz, and Paytm, as part of its investigation into one of the biggest cryptocurrency scams in India, the HPZ Token scam, which was run by ten Chinese nationals and allegedly involved the collection of over INR 2,200 crore from investors across 20 states. WunderBaked, AgreePay, and SpeedPay were also allegedly involved.
Company |
Amount Upheld by ED |
Easebuzz |
INR 33.4 crore |
Razorpay |
INR 18 crore |
CashFree |
INR 10.6 crore |
Paytm |
INR 2.8 crore |
PayU |
INR 130 crore |
Step by Step- How Scam was Piloted?
Through the smartphone app HPZ Token, the accused reportedly persuaded others to invest in cryptocurrency mining, including Bitcoin. Through the incorporation of businesses in at least 20 states and the usage of more than 200 bank accounts, they ran a pan-Indian network. During the holding period, the ED used payment gateways to intercept the funds that were sent overseas.
According to reports, the ED was investigating if the payment gateways notified the Financial Intelligence Unit and the Reserve Bank of India (RBI) and produced Suspicious Transaction Reports (STRs).
Periodically, all financial institutions must submit STRs, which the RBI then forwards to the Financial Intelligence Unit for additional analysis. A Nagaland PMLA court on January 22, 2025, declared Bhupesh Arora, a major accused, a fugitive economic offender. After the ED started its investigation and disregarded a non-bailable warrant, Arora fled to Dubai in 2022. 298 participants in the scheme are named in the chargesheet.

Must have tools for startups - Recommended by StartupTalky
- Convert Visitors into Leads- SeizeLead
- Website Builder SquareSpace
- Manage your business Smoothly Google Business Suite