Chinese loan apps: ED freezes over Rs 46-crore worth funds in Easebuzz, Razorpay, Paytm, Cashfree accounts

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The Enforcement Directorate on September 16 said it has frozen Rs 46.67 crore worth funds kept in payment gateways Easebuzz, Razorpay, Cashfree and Paytm after it carried out raids this week against Chinese-controlled loan apps and investment tokens. The funds have been frozen under the anti-money laundering law.

The searches were launched on September 14 at multiple premises of the accused in Delhi, Mumbai, Ghaziabad, Lucknow and Gaya. Sixteen premises of banks and payment gateways in Delhi, Gurugram, Mumbai, Pune, Chennai, Hyderabad, Jaipur, Jodhpur and Bengaluru in respect of an investigation related to an app-based token named HPZ and related entities were also covered, the federal agency said in a statement.

The money laundering case stems from an October, 2021 FIR filed by the cyber crime unit of Kohima Police in Nagaland, it said. "During the search, various incriminating documents have been recovered and seized," it said.

"Huge balances were found to be maintained in the virtual accounts of the involved entities with payment aggregators like Rs 33.36 crore was found with Easebuzz Private Limited, Pune, Rs 8.21 crore with Razorpay Software Private Limited, Bangalore, Rs 1.28 crore with Cashfree Payments India Private Limited, Bangalore and Rs 1.11 crore with Paytm Payments Services Limited, New Delhi," it said. An amount Rs 46.67 crore was detected and freezed in various bank accounts and virtual accounts, the ED said.

Clarifying on the development, the Easebuzz spokesperson said,  "We, at Easebuzz, would like to clarify that none of the parties mentioned in the ED’s statement belonged to our merchant base. The mentioned entities by authorities were only the counterparties of the merchant, who was using our payment gateway and this merchant had been proactively identified and blocked by us much before the investigation had started, as per our internal risk and compliance process."

Cashfree Payments’ spokesperson said, “we continue to extend our diligent co-operation to the ED operations. We were able to provide the required and necessary information within a few hours on the day of enquiry. The operations and on-boarding processes of Cashfree Payments are fully compliant with existing regulations”.

"With regards to the ongoing investigation against a few suspicious entities who conducted illegal business through multiple payment gateways/banks about 1.5 years ago, we proactively blocked all those suspicious entities and funds associated with them, and have shared their details with authorities. None of the funds which have been directed to be frozen by the authorities belong to Razorpay. As mentioned earlier, we will continue to provide necessary information to authorities to assist in this investigation," Razorpay spokesperson said in a statement.