HPZ Token Scam: Paytm Shares Decline Nearly 9 Per Cent, Company Issues Clarification

Shares of digital payments company Paytm (One97 Communication Ltd.) declined nearly 9 per cent to hit an intraday low of Rs 773.05 apiece on the NSE on January 24. The stock declined after reports emerged of the company being involved in a cryptocurrency scam.

However, Paytm informed the exchanges via a filing that it has not received any new notice, communication or query from the Enforcement Directorate regarding the matter.

“With reference to your emails on the above-mentioned subject and articles published in other media channels on January 24, 2025, we confirm that we have not received any such new notice, communication, or query from the Enforcement Directorate regarding the matter mentioned in the media articles,” One 97 communications said.

The digital payments company also mentioned that the information published in the media reports is incorrect and misleading. Paytm said that the reports pertain to similar old enquiries regarding third-party merchants.

“The information published is factually incorrect and misleading and we had not received any query from the media prior to the publishing of this news article.  Please refer to our letter dated September 4, 2022, regarding the Directorate of Enforcement's (ED) search operations involving certain merchants for whom we provided payment processing solutions. The instances currently being reported by the media pertain to similar old enquiries regarding third-party merchants,” the company said in the filing.

Earlier this week reports alleged that the ED had launched an investigation into Paytm’s operations linked to the HPZ Token cryptocurrency scam. The reports claimed that the ED had frozen approximately Rs 500 crore in virtual accounts linked to eight payment gateways, including Razorpay, PayU, Easebuzz, and Paytm.

The virtual accounts were frozen to curb the scam being conducted via the HPZ Token Mobile app, which has allegedly collected over Rs 2,200 crore from investors across 20 states as per the report.

According to reports the scam involved convincing individuals to invest in cryptocurrency mining ventures, including Bitcoin. Additionally, the scamsters had also established a network of shell companies across states using over 200 bank accounts to launder funds. The scam extended across states such as Delhi, Karnataka, Uttar Pradesh, Maharashtra, Gujarat, Tamil Nadu, and West Bengal.

While the fintech giant has issued a clarification to the bourses, the ED’s investigation has continued to impact the stock’s performance. At the time of writing this story Paytm’s stock traded at Rs 810.9 apiece on the NSE down by 4.5 per cent.

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