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ED asks Paytm to freeze certain amounts of some merchant IDs after raids (Ld)

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The Enforcement Directorate (ED) after conducting raids on multiple locations belonging to Payment Gateways i.e Pay and PayU in connection with a case of Chinese Loan apps, have asked Paytm to freeze certain amounts of some Merchant IDs (MIDs).



Sources said the raids were carried out in Mumbai, Delhi, Gurugram, Lucknow and Kolkata.

The ED has not made any official comment on this.

On September 3, raids were conducted on the premises of online payment gateways, including: Razorpay Pvt LtdCashfree Payments and Paytm Payment Services Ltd.

A Paytm spokesperson said that as part of the ongoing investigation of a specific set of merchants, the ED has sought information about such merchants to whom we provide payment processing solutions.

“These traders are independent entities and none of them is our group entity. We are working and will cooperate fully with the authorities and all guidelines are duly followed,” said Paytm’s spokesperson.

The ED has ordered Paytm to freeze certain amounts of the Merchant IDs of a specific set of merchant entities (as stated by the ED in its press release).

“None of the funds that have been ordered to be frozen are owned by Paytm or any of our group companies. As we mentioned earlier, ED continues to seek information about certain merchants from various payment service providers, and we have shared the required information, ‘ said the Paytm spokesperson.


What is the case?

The case is based on 18 FIRs registered by the Cyber ​​Crime Police Station, Bengaluru City, against numerous individuals for their involvement in extortion and intimidation of the public who had used small loans through the mobile apps operated by those entities. .

“The investigation revealed that these entities are controlled by Chinese individuals. The modus operandi of these entities is that by using forged documents of Indians and making them dummy directors of those entities, they generate proceeds of crime,” he said. the ED. .

The ED had said it had come to its knowledge that the entities were conducting their suspected business through various Merchant IDs/accounts held at Payment Gateways/banks.

The premises of Razorpay Pvt Ltd, Cashfree Payments, Paytm Payment Services Ltd and entities controlled/operated by Chinese persons were involved in the searches.

“During the searches, it was noted that the said entities were generating crime proceeds through various Merchant IDs/accounts held with Payment Gateways/banks, and they also do not work from the addresses listed on the MCA website/registered address and fake addresses. An amount of Rs 17 crore has been seized from merchant IDs and bank accounts of these Chinese-controlled entities,” the ED official had said.

Meanwhile, a spokesperson for Razorpay had said: “About a year and a half ago, some of our traders were investigated by the police. As part of the ongoing investigation, the authorities have asked for additional information to assist in the investigation. We have fully cooperated and shared KYC and other details. The authorities were satisfied with our due diligence process.”

The searches are in full swing.

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