The Central Bureau of Investigation (CBI) in India has conducted a nationwide search operation as part of an ongoing investigation into a fraudulent investment scheme linked to the HPZ Token App. The operation took place in 30 locations across 10 states and Union Territories and aimed to crack down on individuals and companies involved in the scheme. The CBI targeted two private companies and their directors who are accused of misleading the public and enticing them to invest in a non-existent cryptocurrency mining machine rental scheme. During the raids, incriminating documents and digital evidence such as mobile phones, hard drives, SIM cards, debit cards, and email accounts were seized.
The HPZ Token App promised users high returns on their investments through mining machines for popular cryptocurrencies like Bitcoin. The fraudsters guaranteed astronomical profits from Bitcoin mining investments to lure unsuspecting victims. The investigation has identified approximately 150 bank accounts allegedly used by the accused to collect funds from investors. Initial payouts made to some investors were likely intended to build trust before the funds were transferred abroad through various means such as conversion into cryptocurrencies or Hawala transactions, an informal money transfer method.
The crackdown by the CBI on the app-based crypto investment fraud comes shortly after the Directorate of Enforcement (ED) of India announced that it had seized a major crypto money laundering case connected to a gaming app. The ED seized frozen crypto assets worth ₹90 crore in connection with the scam, stored in 70 accounts linked to major crypto wallets such as Binance, ZebPay, and WazirX. The app, known as E-Nugget, posed as a gaming platform and enticed gamers with promises of high returns on investments.
A recent survey by Mudrex has revealed that nearly 45% of individuals with retirement plans in India have invested in cryptocurrencies. The survey focused on crypto investments and indicated the evolving perception of cryptocurrencies as a mainstream asset class. Half of the respondents believed that cryptocurrencies would become the primary asset class within the next five years, showing increased confidence and acceptance within the crypto space. The recent surge in the price of Bitcoin has injected fresh life into Indian cryptocurrency exchanges, with trading volumes on top platforms reaching a ten-month high in February, including CoinDCX, WazirX, and BitBNS recording significant trading volumes.
The investigation into the HPZ Token App highlights the prevalence of fraudulent investment schemes in the cryptocurrency space and the need for regulatory bodies to crack down on such activities. The seizure of frozen crypto assets worth ₹90 crore by the ED in connection with a gaming app money laundering case underscores the challenges faced by authorities in tackling crypto-related crimes. The survey by Mudrex indicating the growing interest in cryptocurrencies among individuals with retirement plans reflects the changing perceptions of digital assets in India. The surge in trading volumes on Indian cryptocurrency exchanges following the rise in Bitcoin prices signals renewed interest and activity in the crypto market in the country.
