HPZ Token Scam:Cryptocurrency has become a popular investment avenue in India, offering opportunities for significant returns. However, this rise has also led to the emergence of fraudulent schemes preying on unsuspecting investors.One such scheme is the HPZ Token scam, which has defrauded numerous investors across the country. This guide aims to explain the scam in simple terms and provide tips on how to protect yourself from similar fraudulent activities.
What is HPZ Token Scam?
The HPZ Token scam involved a mobile application named “HPZ Token,” which promised users high returns on investments in cryptocurrency mining equipment. Investors were enticed with offers such as earning ₹4,000 daily for three months on an initial investment of ₹57,000. Initially, some returns were provided to gain the trust of investors. However, as more people invested, the app became inaccessible, and the funds were siphoned off by the fraudsters. [1]
How Did the Scam Operate?
Scammers used clever tactics to target Indian investors, especially those new to cryptocurrency. Here’s how they operated:
- Attractive Promises: The scammers lured investors by promising substantial daily returns, which were unrealistic and unsustainable.
- Use of Shell Companies: Multiple shell entities, some with alleged Chinese links, were created to facilitate the fraud. These entities opened bank accounts and merchant IDs to collect and launder the proceeds.[2]
- Initial Payouts: To build credibility, initial investors received the promised returns, encouraging them to invest more and refer others.
- Sudden Disappearance: Once a significant amount of money was collected, the app and associated websites became inaccessible, leaving investors without their funds.
Enforcement Directorate’s (ED) Actions
The Enforcement Directorate (ED) initiated an investigation based on an FIR registered by the Cyber Crime Police Station in Kohima, Nagaland. The ED conducted searches across multiple locations in India, resulting in the attachment of movable and immovable properties worth ₹106.20 crore in India and Dubai. These assets were linked to individuals and shell entities involved in the scam.[3]
Red Flags to Watch Out For
As an investor, it’s important to know the warning signs of such scams. Here’s what to look out for:
- Unrealistic Returns: Be cautious of schemes promising high or guaranteed returns with little to no risk.
- Lack of Transparency: If a company lacks clear information about its operations, management, or business model, it’s a warning sign.
- Pressure Tactics: Scammers often pressure individuals to invest quickly, claiming limited-time offers.
- Unregistered Platforms: Ensure that the investment platform is registered and complies with regulatory norms.
How to Protect Yourself
Protecting yourself from scams is crucial, especially in the unregulated world of cryptocurrency. Here’s what you can do:
- Conduct Thorough Research: Before investing, research the company, its founders, and its business model.
- Verify Registrations: Check if the platform is registered with relevant financial regulatory authorities.
- Seek Professional Advice: Consult with financial advisors or professionals before making significant investment decisions.
- Report Suspicious Activities: If you come across potential scams, report them to law enforcement agencies promptly.
Conclusion
The HPZ Token scam serves as a stark reminder of the importance of vigilance in investment activities. By staying informed and cautious, investors can protect themselves from falling victim to such fraudulent schemes. Always remember, if an investment opportunity seems too good to be true, it probably is.
