India’s Central Bureau of Investigation (CBI) has initiated a nationwide search operation as part of an ongoing probe into a fraudulent investment scheme involving a crypto app. The operation, which spans across 30 locations in 10 states and Union Territories, aims to crackdown on individuals and companies associated with the HPZ Token App scheme. The CBI’s searches targeted two private companies and their directors, who are accused of deceiving the public and enticing them to invest in a non-existent cryptocurrency mining machine rental scheme. During the raids, incriminating documents and important 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 by using mining machines for popular cryptocurrencies like Bitcoin. The fraudsters attracted unsuspecting victims by guaranteeing astronomical profits from Bitcoin mining investments. The investigation has identified around 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 secretly transferred abroad. In many cases, the money was converted into cryptocurrencies or moved through Hawala transactions, an informal method of money transfer.
The CBI’s crackdown on this app-based crypto investment fraud follows the Directorate of Enforcement (ED) of India’s recent announcement that it has seized a major case of crypto money laundering linked to a gaming app. The authority also froze crypto assets worth ₹90 crore ($10 million) in connection with the scam. The frozen cryptos were held in 70 accounts linked to major crypto wallets such as Binance, ZebPay, and WazirX. The ED stated that these crypto assets were then transferred to its own crypto wallet.
In addition to these developments, a survey conducted by Mudrex revealed that nearly 45% of individuals with retirement plans in India have entered the world of crypto. The survey focused on crypto investments and indicated that half of the respondents believed cryptocurrencies would become the primary asset class within the next five years. This suggests a growing confidence and acceptance of cryptocurrencies as a mainstream asset. The recent surge in the price of Bitcoin has also revitalized Indian cryptocurrency exchanges, with trading volumes reaching a ten-month high in February. Leading Indian exchanges like CoinDCX, WazirX, and BitBNS recorded significant trading volumes during that period.
