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Chinese Loan Apps Fraud: Indian Agency Raids Razorpay, Paytm, Cashfree

 

On Saturday, The Indian law Enforcement Directorate agency (ED) carry out raids at nine premises connected to online payment gateways including Paytm, Cashfree, and Razorpay in Bengaluru. Also, some of these companies are believed to be involved in illegal betting. 

The official said the raids were conducted in connection with a money laundering case — part of an ongoing investigation against some illegal loan apps allegedly run by Chinese Nationals. 

The ED reported that the law enforcement agency successfully seized Rs 17 crore kept in “merchant IDs and bank accounts of these Chinese persons-controlled entities” during the raids. 

In a statement, a Razorpay spokesperson said: “Some of our merchants were being investigated by law enforcement about a year-and-a-half back. As part of the ongoing investigation, the authorities requested additional information to help with the investigation. We have fully cooperated and shared KYC and other details. The authorities were satisfied by our due diligence process”. 

Furthermore, the agency added that after it started working on probes, many of these companies shut down their business and diverted funds through fintech companies to buy crypto assets so the money could be laundered abroad. 

In this connection, the Law enforcement agency searched various premises associated with crypto exchange WazirX and froze Rs 64 crore in its accounts. 

Cashfree said its processes adhere to PMLA directions. “We extended our diligent cooperation to the ED operations, providing them the required and necessary information on the same day of inquiry. Our operations and onboarding processes adhere to the PMLA and KYC directions, and we will continue to do so in the time to follow,” said a company spokesperson. 

Additionally, in August 2020, the agency successfully ran a raid and froze Rs 47 crore belonging to a Chinese company that was running illegal betting and loan apps in India. Also, the agency conducted searches at 15 premises in connection with the company across Delhi, Mumbai Gurgaon, and Pune. 

The Directorate of Enforcement (ED) agency is Indian law enforcement and economic intelligence agency which works for enforcing economic laws and conducting legal battles against economic frauds and crimes in India.



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