HPZ Token Scam: Indian Authorities Attach ₹950 Crore in Cryptocurrency Fraud Investigation
Indian financial authorities have taken decisive action against one of the country's largest digital investment scams, with the Enforcement Directorate (ED) attaching assets worth ₹950 crore ($115 million) in the ongoing HPZ Token fraud investigation. The agency filed a Supplementary Prosecution Complaint under the Prevention of Money Laundering Act before the Special PMLA Court in Dimapur on January 12, 2026, marking a significant development in a case that has duped thousands of investors across the nation.
Background and Context
The HPZ Token scam represents a sophisticated cryptocurrency fraud that operated through a mobile application promising unusually high returns on digital token investments. The ED's investigation began following an FIR (First Information Report) registered by the Cyber Crime Police Station in Kohima, Nagaland, on October 8, 2021. The probe has since expanded to incorporate additional FIRs from Guwahati and Delhi, indicating the nationwide scale of the operation. This case highlights growing concerns about unregulated crypto-based investment platforms targeting vulnerable retail investors in India's rapidly expanding digital economy.
Key Figures and Entities
According to the ED's supplementary complaint, Bhupesh Arora has been identified as the primary accused operating the fraudulent scheme. Arora allegedly controlled a network of shell companies including Digi India Marketing, Analytic Business Ventures Pvt. Ltd., Freebee Solutions Pvt. Ltd., Durvinta Solutions Pvt. Ltd., Zevian Trading Pvt. Ltd., and Sark Enrol System Pvt. Ltd. The investigation reveals that these entities, along with Shine Technology Pvt. Ltd. (STPL) and Lillian Technocab Pvt. Ltd. (LTPL), were instrumental in laundering the proceeds of crime. Arora is currently in custody in connection with another similar financial fraud case involving a fake investment application, suggesting a pattern of sophisticated digital financial crimes.
Legal and Financial Mechanisms
The scam employed a complex money laundering scheme utilizing multiple UPI IDs linked to mule accounts held with ICICI Bank. Financial analysis shows that victims' funds were layered through various payment aggregator platforms before being deposited into accounts controlled by the accused. The ED has successfully traced approximately ₹200 crore as Proceeds of Crime, while attaching assets worth ₹950 crore lying in various mule accounts. The use of dummy directors and shell companies was central to obscuring the beneficial ownership of funds, demonstrating the challenges faced by Indian authorities in tracking digital financial crimes across multiple banking and payment systems.
International Implications and Policy Response
The investigation has uncovered that portions of the laundered funds were transferred outside India through hawala channels, raising concerns about the international dimensions of the scam. This case underscores significant regulatory gaps in monitoring cryptocurrency investments and cross-border digital transactions. Indian financial authorities are increasingly focusing on strengthening oversight of digital payment systems and crypto-related investments, with this case likely to influence future regulatory frameworks. The HPZ Token scam serves as a cautionary tale about the risks posed by unregulated digital investment platforms and the need for enhanced consumer protection in India's evolving financial technology landscape.
Sources
This report draws on information from the Enforcement Directorate's official statements regarding the HPZ Token investigation, court filings from the Special PMLA Court in Dimapur, and police records from the Cyber Crime Police Station in Kohima, CID PS Ulubari in Guwahati, and CBI Delhi. The main prosecution complaint was filed on March 4, 2024, with the Supplementary Prosecution Complaint submitted on January 12, 2026. Further details come from financial analysis conducted by the ED regarding the flow of funds through various banking channels and payment aggregator platforms.
