In a dramatic development that underscores the growing sophistication of financial crimes in the digital age, a 39-year-old Dubai-based hotelier has been arrested by Indian authorities in connection with the notorious HPZ Token scam—a sprawling cryptocurrency fraud worth over ₹2,200 crore (Dh950 million). The arrest, confirmed by the Faridabad Police in Haryana, marks a significant breakthrough in one of India’s largest tech-enabled financial rackets in recent years.
The accused, whose name has been withheld for legal reasons, was apprehended in Rohini, Sector 11, New Delhi. He is now under police remand and facing charges related to organized cyber fraud, money laundering, and forgery. The arrest was the result of a months-long joint investigation by the Faridabad Police and the Enforcement Directorate (ED), India’s premier financial crime-fighting agency.
The HPZ Token Scam: A High-Tech Trap
At the core of the scandal lies HPZ Token, a deceptive cryptocurrency scheme that lured thousands of Indian investors with promises of lucrative daily returns from crypto mining and digital investments. Victims were asked to download a mobile application and deposit money in exchange for tokenized returns. Initially, investors saw fake profits to build trust—only for their money to vanish after larger investments were made.
According to the ED, more than 200 shell companies were created to launder money, mask transactions, and funnel defrauded funds abroad, often through illegal payment gateways. The scam relied heavily on social media promotions, fake customer service agents, and fabricated dashboards to keep the illusion alive.
The Mastermind and His Dubai Connection
The 39-year-old suspect, previously running a four-star hotel in Dubai Marina, allegedly used his hospitality business as a front to launder funds generated through the scam. After the Enforcement Directorate initiated its investigation in 2022, the accused fled India and relocated to Dubai. There, he operated with relative impunity while continuing to expand his fraudulent empire.
Faridabad Police say he returned to India just three weeks ago after the Punjab and Haryana High Court quashed a lookout circular against him. The court, however, mandated that he cooperate with ongoing investigations—a condition he appears to have violated.
“We were tracking one of the payment gateway accounts used in the scam, which led us to him,” said Faridabad Police PRO Yashpal Yadav. “The account was created using forged documents. His arrest is a big catch.”
Modus Operandi: Fake Returns, Real Losses
The HPZ Token scam operated under the guise of a legitimate fintech opportunity. The suspect and his associates created sleek mobile apps and user interfaces to deceive investors. These apps showed consistent returns, often 10–15 percent monthly, and used referral bonuses to expand their reach.
The process followed a familiar pattern:
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Social Media Lure: Victims were shown enticing ads or posts promoting the HPZ Token platform as a fast-growing crypto-mining opportunity.
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App Installation: Users were asked to download a custom-built app that simulated a legitimate trading interface.
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Initial Investment: Victims were asked to invest small sums and were shown fake returns.
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Bigger Investment Requests: Once trust was built, they were encouraged to invest larger amounts.
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Disappearance of Funds: The platform eventually stopped functioning, customer service contacts vanished, and the website went offline.
The police revealed that many victims transferred amounts ranging from ₹50,000 to ₹20 lakh into as many as 11 different accounts, all allegedly linked to the prime accused and his network.
The Money Trail: How Funds Were Laundered
Investigators believe that the suspect retained 30 percent of the defrauded funds and transferred the remaining 70 percent to his Dubai-based associate, who handled crypto conversion and further laundering.
Funds were routed through digital payment platforms, fake merchant accounts, and shell corporations before being converted into cryptocurrency—mostly stablecoins like USDT (Tether). The ED believes that the accused partnered with Chinese handlers who received the crypto assets in offshore wallets.
This multi-layered approach made tracking the money trail challenging. However, forensic audits and digital evidence recovered from seized mobile devices and servers helped authorities piece together the network.
Victim’s Complaint That Triggered the Bust
The case gained momentum after a Faridabad-based engineer filed a formal complaint in January 2024. The victim reported being duped through a fake stock investment link shared via social media. He transferred over Dh880,000 (approx. ₹2 crore) into multiple accounts but received no returns.
This complaint became the foundation of a wider probe. Based on bank transactions, digital footprints, and cross-border communications, the police zeroed in on the hotelier’s involvement.
With this arrest, the number of accused taken into custody in the HPZ Token case has now reached 12. Authorities are actively pursuing his Dubai-based partner and three other key figures involved in the operation.
Enforcement Directorate’s Role and Findings
The Enforcement Directorate (ED) has played a critical role in unearthing the financial mechanics of the scam. It declared the accused a fugitive economic offender in early 2025—a rare legal designation granted to those accused of economic crimes worth over ₹100 crore and who evade the judicial system.
So far, the ED has:
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Identified Rs2.2 billion (Dh956 million) in laundered proceeds.
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Frozen or attached assets worth ₹497 crore (Dh216 million).
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Seized digital records, phones, servers, and transaction logs.
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Discovered over 200 shell companies, most of them set up using fake directors and forged KYC documents.
The agency is also working with Interpol and Dubai authorities to widen the scope of the probe.
Visit Enforcement Directorate Website
Legal Ramifications and Next Steps
The accused faces multiple charges under:
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The Prevention of Money Laundering Act (PMLA)
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The Information Technology Act
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The Indian Penal Code (IPC) — including fraud, forgery, and conspiracy
Faridabad Police confirmed that a fresh lookout circular is being issued against the Dubai-based co-conspirator to ensure his arrest upon any entry into India.
Meanwhile, investigators are also scrutinizing real estate holdings, luxury assets, and offshore accounts tied to the accused. More arrests are expected in the coming weeks as authorities close in on the remaining members of the syndicate.
The Bigger Picture: Rise of Crypto Frauds in India
The HPZ Token scam is part of a disturbing trend where cryptocurrency scams are rising sharply in India, especially those disguised as legitimate mining or trading apps. The relative anonymity of blockchain transactions and lack of regulatory oversight on international exchanges have made these frauds easier to perpetrate.
Recent reports by cybersecurity firms suggest that:
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Over ₹6,000 crore worth of crypto frauds have been reported in India since 2022.
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Most victims are middle-class, tech-savvy individuals aged 25–45.
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Scammers often operate from international locations using digital tools like VPNs, fake identities, and remote-access software.
Experts are calling for stricter KYC norms, mandatory crypto exchange registration, and public awareness campaigns to combat the menace.
Public Reaction and Investor Warning
Social media is abuzz with the arrest news, with many victims coming forward to share their experiences. Investor rights groups are demanding full recovery of the stolen funds and stricter penalties for economic offenders.
Consumer watchdogs are warning users against:
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Downloading investment apps from unofficial sources
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Transferring funds to unknown accounts
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Believing in “guaranteed” crypto returns
The Indian government, in coordination with the ED and the Reserve Bank of India (RBI), is expected to introduce new fintech regulations to curb such scams.
Conclusion: A Wake-Up Call for Fintech Regulation
The arrest of the Dubai hotelier in connection with the HPZ Token scam sends a strong message—financial crimes in the digital era may be global, but so is justice. As investigators dig deeper, more layers of the scam are expected to be unearthed, possibly revealing an international syndicate of cybercriminals.
For the Indian government, this case presents an urgent opportunity to strengthen crypto regulations, tighten cross-border payment controls, and ensure that fintech innovation is not misused by criminals.
As for investors, the HPZ Token saga is a hard-hitting reminder that if something seems too good to be true—it probably is.
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