ONLINE GAMING FRAUD

  • The Enforcement Directorate (ED) is investigating multiple cases of online gaming fraud, including those against companies run by some China-based entities through dummy Indian directors, involving transactions worth about ₹4,000 crore.
  • In the case pertaining to Chinese entities, the agency is pursuing the money trails of 1,815 suspect accounts.
  • It alleges that two companies named Linkyun Technology Private Ltd. and Dokypay Technology Private Ltd. were involved in duping the users to the tune of ₹1,146 crore.
  • According to the ED, the initial capital in these firms was brought in the form of Foreign Direct Investment (FDI) from China.
  • The Indian companies acted as payment collectors for multiple mobile applications which were banned from Google Play Store for malpractices, as alleged.
  • The ED alleges to have found that those behind the scam used various payment gateways for receiving domestic revenues and for carrying out international “hawala” transactions.
  • Following a trail involving ₹263 crore, the ED found that ₹106 crore was sent to Singapore and ₹100 crore to Hong Kong using multiple shell companies. About ₹57 crore was routed through a cryptocurrency exchange.
  • The agency also zeroed in on five domestic entities that had opened accounts with a public sector bank in Mumbai.
  • Subsequent investigations led to the detection of 49 more accounts with a private bank and overseas transfer of about ₹723 crore. Another account with a Korean bank’s Gurugram branch was used to send ₹42 crore.
  • Based on the findings, the ED has so far made several arrests, including that of Chinese national Yan Hao, crypto trader Naisar Shailesh Kothari, an Indian director named Dhiraj Sarkar and Deepak Nayyar.
  • Following Mr. Nayyar’s arrest in May, the agency had alleged that the funds were laundered to Hong Kong through select branches of the State Bank of India and the State Bank of Mauritius in Mumbai.
  • Earlier, a chartered accountant, Ravi Kumar, was arrested in the case and assets worth ₹45 crore have been seized.
  • In another case, the ED has frozen assets worth ₹68.53 crore in a probe against Coda Payments India Private Ltd. (CPIPL) and “Garena Free Fire” mobile game. Unauthorised payment deductions against the sale of digital tokens to the players were made by the accused.

SOURCE: THE HINDU, THE ECONOMIC TIMES, PIB

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