76 Chinese entities, its 10 directors under ED probe

THE INVESTORES ARE PROMISED HIGHER RETURNS ON INVESTING IN BITCOIN MINING

MUMBAI: The money laundering investigation by the Enforcement Directorate (ED) into the alleged bitcoin mining fraud scheme via the HPZ token app — which allegedly involves misleading the public into investing in non-existent cryptocurrency mining machines — has revealed the role of 76 Chinese-controlled entities and 10 Chinese directors in the case.

The agency’s investigation has revealed the alleged role of 299 accused persons and entities, including 76 Chinese entities, 10 of whose directors are Chinese, and two other entities controlled by other foreign nationals, ED sources said. The ED had started its probe based on an FIR registered by the Cyber Crime Police Station, Kohima ( Nagaland) under various sections of the Indian Penal Code, 1860 and IT Act, for the alleged cheating of investors who were promised higher returns on investing money to be used for the mining of bitcoins and other cryptocurrencies, in which the HPZ Token app was used, ED sources said.

The ED submitted a prosecution complaint against the 299 accused in a Dimapur (Nagaland) special court in March, whose cognisance was taken by it thereafter finding that a case has been made out under the Prevention of Money Laundering Act, against the said accused persons, the sources said. The inquiry revealed that various bank accounts and merchant IDS had allegedly been opened by bogus firms, with dummy directors /proprietors, for rotation of the proceeds of crime representing funds fraudulently received for illegal online gaming and betting and investment for bitcoin mining, the sources said. The modus operandi of the accused, the source explained is that for an investment of ₹57,000, returns at the rate of ₹4,000 per day for 90 days were allegedly promised to the investors but the money was paid only once and thereafter fresh funds were sought.

ED conducted search operations at 44 locations nationwide, including Mumbai, in the past and an amount of ₹176.67 crore, which were maintained by bogus entities in banks/virtual accounts, were frozen. ED also attached movable/immovable properties to the extent of ₹278.70 crore held in the name of several dummy entities. ED’S total seizure and attachment in the case stands at ₹455.37 crore.