Learn from the HPZ Token Scam 

In recent years, cryptocurrency has opened up a new frontier for investors seeking exponential returns. However, it has also become fertile ground for fraud and deception. 

One of the most shocking examples in India was the HPZ Token scam, a fraudulent scheme disguised as a legitimate crypto investment opportunity. 

This article explores the details of the HPZ Token scam, its operational tactics, the involvement of major payment gateways, and key takeaways for potential investors.

What Was the HPZ Token Scam?

The HPZ Token scam was an app-based fraud scheme that lured investors with promises of high daily returns through investments in Bitcoin (BTC) and other crypto mining machines. 

The scheme claimed that with an investment of around Rs 57,000, users could earn up to Rs 4,000 per day for three months.

While returns were initially paid out, building trust and drawing in larger investments, the scheme soon unraveled as it became evident that the funds were being funneled into various shell companies across India. 

These companies were suspected to have links to Chinese entities and were spread across states such as Delhi, Karnataka, Maharashtra, and West Bengal.

Read Also: New Crypto Mining Regulation: Russia's Way to Combat Illegal Activities

The Modus Operandi

• Initial Payouts: Early investors received promised returns, giving an illusion of credibility.
• Viral Growth: Word of mouth and social media promotion led to rapid user acquisition.
• Use of Shell Companies: The collected funds were routed through over 200 bank accounts associated with fake companies.
• Cross-Border Money Transfers: A portion of the money was sent abroad, likely to escape Indian regulatory scrutiny.

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Payment Gateways Under the Scanner

The Enforcement Directorate (ED) launched an investigation after the Cyber Crime Police Station in Nagaland registered a complaint in 2021. 

During the investigation, several prominent payment gateways were implicated for processing transactions for HPZ Token:

• PayU: Rs 130 crore frozen
• Easebuzz: Rs 33.4 crore frozen
• Razorpay: Rs 18 crore frozen
• CashFree: Rs 10.6 crore frozen
• Paytm: Rs 2.8 crore frozen

Other platforms involved allegedly include WunderBaked, AgreePay, and SpeedPay.

Read Also: Beware of DeepSeek AI Crypto Token Scam Circulating by Exploiting DeepSeek Trend

Industry Response and Denials

While media reports claimed involvement of these gateways, major fintech companies strongly denied receiving any ED notices or being under investigation:

• Paytm: Stated that the merchants in question were third-party entities and not part of its group.
• PayU: Refuted the media reports, emphasizing its compliance with Indian regulations.
• Razorpay: Labeled the reports as factually incorrect and misleading.

All three companies reiterated their commitment to governance, transparency, and cooperation with regulatory authorities.

Legal and Enforcement Developments

In January 2025, a special PMLA court in Nagaland declared Bhupesh Arora, a key player in the HPZ scam, a fugitive economic offender. 

This status enabled the ED to confiscate overseas assets worth Rs 35 crore. In total, assets worth over Rs 106 crore in India and Dubai have been provisionally attached.

The ED continues to probe whether the involved payment gateways generated Suspicious Transaction Reports (STRs) and alerted the Financial Intelligence Unit and Reserve Bank of India, as required by law.

Read Also: Spain's Crypto Scam Network Exposed: Over 5,000 Victims Identified

Lessons Learned from the HPZ Token Scam

1. Too Good to Be True Returns: Any investment promising unusually high daily returns should be treated with skepticism.
2. Check for Transparency: Investors must research the company’s leadership, licensing, and jurisdiction.
3. Verify App Legitimacy: Download apps only from official platforms and verify their reviews.
4. Understand Payment Gateways: While many fintech platforms act as intermediaries, not all transactions are thoroughly vetted in real-time.
5. Watch for STR Filings: Financial institutions are legally bound to report suspicious activity; lack of reporting can indicate negligence or complicity.

Read Also: Crypto Fraud Cases Occurring in Firefox Through Add-ons in the Form of Crypto Wallets

Conclusion

The HPZ Token scam is a reminder that even the most convincing opportunities can mask fraudulent intent. By prioritizing awareness and caution, investors can protect themselves from falling into similar traps in the future.

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FAQ

What is the HPZ Token scam?

The HPZ Token scam was a fraudulent investment scheme posing as a crypto mining opportunity. It promised massive daily returns and ultimately siphoned over Rs 2,200 crore from investors.

How did the HPZ Token scam operate?

Investors were enticed through a mobile app and promised daily returns. Early payouts built trust, after which funds were diverted into shell companies and transferred abroad.

Which payment gateways were involved in the HPZ scam?

Media reports named Paytm, Razorpay, PayU, Easebuzz, CashFree, and others. However, these companies have denied receiving any official communication from ED.

What action did the ED take in the HPZ Token scam?

The ED froze around Rs 500 crore in assets, attached properties worth Rs 106.2 crore, and declared one of the main accused, Bhupesh Arora, as a fugitive economic offender.

What should investors learn from this case?

Always perform due diligence before investing, be skeptical of unrealistic returns, and use platforms that are regulated and transparent.