ED Uncovers ₹2,200 Cr Cross-Border Crypto Scam: 437 Suspects

According to a report, the filing under the Prevention of Money Laundering Act (PMLA) is based on FIRs lodged at the Cyber Crime Police Station, Kohima, Nagaland; CID Police Station, Ulubari, Guwahati, Assam; and CBI (EO-III), Delhi.It’s like a relay race of law enforcement, except with more paperwork and fewer batons.

The investigation relates to a complex fraud case where thousands of investors across India were allegedly misled by promises of high profits from investments in Bitcoin mining machines. It’s the kind of promise that makes you question your life choices while trying to explain to your mother that “mining” isn’t literal mining for gold in a cave, unless you count the digital kind.

The HPZ token scam

The HPZ Token is reported to be a cryptocurrency investment scheme operated via a smartphone application, which commenced operations in June 2021. According to sources, the operators shut down the scheme in August 2021, leaving victims with nothing but a phone that won’t unlock and a return on investment that never existed. Charming, really-the financial equivalent of a magician’s disappearing act, but without the confetti.

According to the ED, the conspirators include Bhupesh Arora and his cohorts. The fraud allegedly involved a network of shell corporations, mule accounts, hawala agents, and foreign exchange dealers to launder proceeds generated from the scheme. It’s like a bad soap opera written by someone who binge-watched too many spy thrillers and believed “shell company” was a stretch goal in accounting.

The total number of accused persons in the second supplementary prosecution case now stands at 437 after 87 new accused have been brought to notice. If you’re keeping score at home, that’s more people than a mid‑season drama requires, and more emails than your spam folder can handle.

Connections across China and India

Investigation found that proceeds of crime routed through companies such as Shigoo Technology Private Limited and Lillian Technocab Private Limited were also diverted to dubious firms such as Digi India Marketing, Analytix Business Ventures Private Limited, Freebie Solutions Private Limited, Truvinta Solutions Pvt. Ltd., Zavion Trading Pvt. Ltd., and Sark Enroll System Private Limited. These companies are allegedly linked to Bhupesh Arora and others. It’s the kind of cross-border web that makes you rethink your life choices and your tax advisor’s career path.

The probe also identified the involvement of Chinese-affiliated entities used to collect and layer funds. Investigators noted overlaps in addresses, email IDs, and directors across multiple entities, indicating coordinated activity. It’s almost like a group project, only one where no one wants to take the blame and everyone wants the profits.

One such entity, Zhudao Infotech Private Limited, is reportedly operated by General Manager Ming Lou and Director Jian Li. It’s the kind of corporate chess that makes you wish you’d studied something simpler, like baking soda chemistry.

Several individuals from China have also been named in the investigation, including Linlei Yuan (Magic Data Technology), Zhou Jie (Larting Pvt. Ltd.), Wan Jun (Jilian Consultants), Ming Lou, Jian Li (Zhudao Infotech), Yanpeng Qu (Mad-Elephant Network Technology), Yi Liu (Omelette Technology), and Kevin Huang (Adexter Concepts). It’s a multilingual parade of names that would double as a geography lesson and a cautionary tale about online hype.

Role of payment firms

The ED further alleges that several Indian firms, including Paygate India Pvt. Ltd., Safexpay Technology Private Limited, Virtuous Payment Solutions LLP, Intrapay Product Solutions, and IECS Consultancy Ltd., facilitated money laundering. Because nothing screams “trustworthy” like a payments ecosystem that doubles as a laundering network, apparently.

According to investigators, key personnel such as Ravi Shankar Gupta, Aditya Oberoi, Pankaj Tripathi, and Joy Oberoi misused payment gateway infrastructure and shell entities to route funds. It’s the kind of insider knowledge that makes you want to switch to a piggy bank and invest in a box of teabags instead.

Freezing assets

As per the ED, such entities were instrumental in allowing an advanced layering of illicit money via a multilayered network comprising fintech companies, payment gateway service providers, online retail platforms, video game firms, and cryptocurrency to hide the source of their money. It’s basically a game of financial pass-the-parcel, but the parcel is a bundle of questionable funds.

Till now, the ED has managed to attach or freeze assets worth several crores in connection with this case. You’d think crores would be a lot, but in the world of scams, it’s almost quaint in a way that makes you want to redecorate your living room with cautionary notes.

Growing risks

The HPZ Token scam highlights the increasing risks posed by investment schemes that use cryptocurrency narratives to attract users with promises of high returns. Authorities have cautioned the public about such unregulated schemes, which may function as large-scale frauds with cross-border links. This supplementary chargesheet builds on earlier findings and expands the scope of the investigation into the broader money laundering network. It’s a reminder that in the age of digital dollars, skepticism is the chic accessory you actually need.