Home / News / India /  ED searches premises of Coda Payments in money laundering case

NEW DELHI: The Enforcement Directorate on Tuesday said it conducted searches at three premise of Coda Payments India Private Ltd. in an ongoing money laundering probe.

To prevent the company from alienating the proceeds of crime which it has collected through unauthorised deductions from the accounts of unsuspecting customers, all the bank accounts, merchant Ids in payment gateways and fixed deposits of CPIPL with balance as on date of Rs. 68.53 crore have been freezed under PMLA, 2002, it said.

Multiple FIRs have been registered against the company and ‘Garena Free Fire’ 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 web/game publishers.

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

“It is alleged that the Coda Payments Private Ltd is resorting to unauthorised deductions from the end users of the games in the name of selling digital tokens to them, which are then used to enhance their playing experience in the game," the ED said in a statement.

The ED also alleged that game developers such as Coda and Garena have designed the payment mechanism intentionally in such a way that following the transaction, a notification pops up seeking permission to make subsequent payments without any authentication.

It is further alleged that the game developers like Garena and Coda Payments India Pvt Ltd have intentionally designed the payment mechanism in such a way that after first successful transaction, a notification pops-up which seeks permission to make subsequent payments without any authentication.

“As the children are not aware of these technical terms, they just click on the notification in a routine manner and end up giving authorization to make all future payments without any further authentication," the statement said.

During the course of search, it has been 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.

“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," the ED said in a statement.

Till date the amount collected by CPIPL is 2,850 crore, out of which 2,265 crore has been remitted outside India after retaining certain percentage of revenue for payment of taxes and nominal profits, it said.

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