ED Searches Coda Payments Premises In Connection With Garena Free Fire, Rs 2,265 Cr Remitted Outside India

An ED official said unsuspecting children end up giving the authorisation to make all future payments on gaming apps without any further authentication.

The ED said that the game developers like Garena and Coda Payments have intentionally designed the payment mechanism in a questionable manner.

Source : Getty

New Delhi: The Enforcement Directorate (ED) on Tuesday said it has conducted searches at three premises belonging to Coda Payments India Pvt Ltd in connection with an ongoing investigation against Coda Payments and 'Garena Free Fire' mobile game.

Till date the amount collected by CPIPL is Rs 2850 crore, out of which Rs 2265 cr has been remitted outside India after retaining a certain percentage for payment of taxes and nominal profits.

The ED case is on the basis of multiple FIRs registered against Coda Payments and the Garena mobile game.

"It is alleged that Coda Payments India Pvt. Ltd which facilitates and collects payments from end users (mostly unsuspecting children) of games like Garena Free Fire, Teen Patti Gold, Call of Duty etc, in the name of monetising and generating revenue for game publishers, is resorting to unauthorized deductions from the end users of these games in the name of selling digital tokens to end users which are used by the end users to enhance their playing experience in the game," said the official.

The ED said that the game developers like Garena and Coda Payments have intentionally designed the payment mechanism in such a way that after the first successful transaction, a notification pops-up which seeks permission to make subsequent payments without any authentication.

The official said that as the children are not aware of these technical terms, they just click on the notification in a routine manner and end up giving the authorisation to make all future payments without any further authentication.

Garena which publishes 'Free Fire' does not have a company or presence in India and is operated from Singapore.

During the course of the search, it was found that Coda Payments India Pvt. Ltd. was incorporated only to act as an agent of Coda Payments Singapore Pte. Ltd. for collecting money from the users and remitting it to the parent company.

The CPIPL has been collecting money in the name of sale of digital content and remitting it to its parent company in Singapore in the name of sale and purchase of digital content. However, the entire operations of Codashop which sells the tokens are being managed by Coda Singapore only and there is no actual sale or purchase of digital content by CPIPL.

"It is only a conduit to remit funds outside India. Till date the amount collected by CPIPL is Rs 2850 crore, out of which Rs 2265 crore has been remitted outside India after retaining certain percentage of revenue for payment of taxes and nominal profits," the official said.

The ED said that to prevent the company from alienating the Proceeds of Crime which it has collected through unauthorized deductions from the accounts of unsuspecting customers, all the bank accounts, merchant IDs in payment gateways and fixed deposits of CPIPL with a balance as on date of Rs 68.53 crore have been freezed under PMLA, 2002.

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)

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