Paytm Denies Reports Of ED Freezing Funds Worth Rs 500 Cr In Crypto Scam Investigation: Report

Paytm clarified that it has not received any formal notice from the ED and described the ongoing reports as relating to previous investigations concerning third-party merchants.

The accused in the scam are believed to have lured individuals into investing in cryptocurrency mining, particularly Bitcoin, through the mobile app HPZ Token.

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Paytm has dismissed recent media reports claiming that the Enforcement Directorate (ED) froze nearly Rs 500 crore in virtual accounts linked to several payment gateways, including PayU and Paytm. As reported by the Times of India, the ED's action was part of its probe into a major cryptocurrency scam involving the HPZ Token, allegedly run by a group of 10 Chinese nationals. The scam is believed to have defrauded investors of over Rs 2,200 crore across 20 states.

Paytm reportedly clarified that it has not received any formal notice from the ED and described the ongoing reports as relating to previous investigations concerning third-party merchants.

#JustIN | #Paytm clarifies, have not received have not received any notice from the Enforcement Directorate

The instances currently being reported by the media pertain to similar old enquiries regarding third-party merchants, co adds pic.twitter.com/KQPCp23hFK

— CNBC-TV18 (@CNBCTV18Live) January 24, 2025

After the clarification, Paytm (listed as One 97 Communications Ltd) managed to pare some of the losses it faced, as its share price slipped 9 percent in early trades today. 

PayU Offers Clarification as Well

Following Paytm's statement, PayU has also clarified that the reports "relate to events in 2022," for which the company has "fully cooperated with the ED in the past." A PayU spokesperson said, "We were not approached by the media for any clarifications prior to the publication of any of these media reports. There are factual inaccuracies in the reports concerning PayU, and we strongly refute any misrepresentations."

"At PayU, we remain committed to complying with all applicable laws and regulations and continue to uphold the highest standards of governance and transparency in all our operations," the spokesperson added.

What Is The HPZ Token Scam?

The accused in the scam are believed to have lured individuals into investing in cryptocurrency mining, particularly Bitcoin, through the mobile app HPZ Token. The operation spanned multiple states in India, with at least 200 bank accounts used to funnel funds.

The network included companies in major states such as Delhi, Karnataka, Uttar Pradesh, Maharashtra, Gujarat, Tamil Nadu, and West Bengal. Notably, over 50 companies in Delhi alone utilized 84 bank accounts for the scam.

The funds, once collected, were sent abroad but were intercepted by the ED during their transfer process, which involved payment gateways.

As per media reports, the ED has frozen substantial amounts from various payment platforms involved in the investigation.