The Enforcement Directorate (ED) has uncovered a large-scale financial scam in India involving illegal loan apps and cryptocurrency schemes, with Chinese nationals identified as key orchestrators behind these operations. Over the past few years, these fraudulent activities have swindled thousands of victims across more than 20 states, leading to an estimated Rs 28,000 crore in criminal proceeds.

The scams typically work through so-called “instant loan” apps, such as LoanPro, FastCredit, SmartRupee, My Cash, and M Rupee. These apps feature high-interest rates ranging from 22% to 40% and hefty platform fees, sometimes up to 40% of the loan amount. Loans are disbursed for very short terms, usually between 7 to 15 days. When borrowers fail to repay, they are subjected to aggressive harassment, bullying, and sometimes blackmail, with personal data often stolen and used to threaten or publicly shame defaulters. Tragically, these tactics have led to several reported suicides.

The masterminds behind these operations remain abroad, controlling syndicates remotely while Indian associates manage local logistics through shell companies, fake fintech firms, and shadowy non-banking financial companies (NBFCs). Funds collected via these apps are routed through Indian and global payment gateways, frequently converted into cryptocurrencies like USDT and BTC, and then siphoned off to China and Hong Kong. The ED has traced the money trail through platforms like Razorpay, Mpurse, and WazirX, freezing significant sums during its investigation.

In many cases, Chinese nationals incorporated Indian entities using dummy directors, running operations through companies such as Shinebay Technologies, Truekindle, and Toucolor. The apps exploited financially vulnerable individuals by advertising online and promising easy access to loans, only to trap them with hidden fees and relentless abuse. In one notable cryptocurrency mining scheme, HPZ Token, ten Chinese nationals amassed over Rs 2,200 crore before converting and sending the funds overseas.

The scale and organization of these scams suggest a wider strategy, likened by investigators to “economic warfare,” aimed at destabilizing India’s financial ecosystem and exploiting its digital vulnerabilities. Indian authorities continue to probe hundreds of fake loan apps, and several Chinese nationals and their Indian collaborators have been arrested or face ongoing investigation.

This growing menace highlights the urgent need for stricter regulation of digital lending platforms, robust cybersecurity measures, and international cooperation to dismantle cross-border fraud networks. As digital finance expands, consumers are urged to exercise caution, verify app legitimacy, and report suspicious activity, helping to safeguard themselves and bolster India’s defences against cyber-enabled financial crimes.

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