Chinese loan app case: ED freezes funds of payment gateways Paytm, Easebuzz, Razorpay, Cashfree

The Enforcement Directorate has carried out search operations against Chinese-controlled loan apps. Searches were conducted at multiple premises of the accused in Delhi, Mumbai, Ghaziabad, Lucknow, and Gaya, according to an official statement issued by ED on September 16. 

The federal agency informed that a total of 16 premises of banks and payment gateways in Delhi, Pune, Gurugram, Mumbai, Chennai, Hyderabad, Jaipur, Jodhpur, and Bengaluru in respect of an investigation related to an app-based token named HPZ and related entities were also covered.

During the course of interactions, the federal agency has also freeze  funds worth ₹46.67 crore kept in payment gateways Easebuzz, Razorpay, Cashfree, and Paytm. These funds have been frozen under the anti-money laundering law, according to the news agency PTI. 

The amount was not found by the ED in search operation, rather was voluntarily being declared by Easebuzz to the investigative agency during the interactions with the federal agency. 

The federal agency has also recovered various incriminating documents related to the Chinese loan apps case during the search operation conducted on September 14. The case was registered by the cybercrime unit of Kohima Police in Nagaland in October 2021.

"Huge balances were found to be maintained in the virtual accounts of the involved entities with payment aggregators like ₹33.36 crore was found with Easebuzz Private Limited, Pune, ₹8.21 crore with Razorpay Software Private Limited, Bangalore, ₹1.28 crore with Cashfree Payments India Private Limited, Bangalore and ₹1.11 crore with Paytm Payments Services Limited, New Delhi," it added as quoted by news agency ANI.

Earlier on September 3, the ED also conducted search operations at Bengaluru premises of these online payment gateways as part of an ongoing probe against “illegal" instant smartphone-based loans “controlled" by Chinese persons.

During the searches, it seized an amount of ₹17 crore which was kept “in merchant IDs and bank accounts of these Chinese persons-controlled entities". The modus operandi of these entities is that they used forged documents of Indians and made them dummy directors of the entities and generated proceeds of crime

The case is based on 18 FIRs registered by Bengaluru Police’s cyber crime station against numerous entities/persons in connection with their involvement in extortion and harassment of people who had availed small loans through the mobile apps being run by the entities/persons.