Paytm denies being linked to Chinese loan merchants after ED crackdown

One 97 Communication, a company of Paytm that provides payment services, has denied having any link with Chinese loan merchants. The Enforcement Directorate (ED) has targeted these merchants as part of an investigation into a Chinese loan app. The ED had told on Saturday that it has raided the premises of some online payment gateways. These include Paytm, Razorpay and Cashfree.

Paytm in a regulatory filing told, “ED has sought information about merchants to whom we provide payment processing solutions. We wish to clarify that these merchants are separate entities and none of them are entities of our group.” Paytm said that ED has not directed to block any merchant linked to it or its group entities. According to a report, the ED has seized funds of around Rs 17 crore kept in some merchant accounts linked to Chinese citizens. ED had conducted these raids under the Prevention of Money Laundering Act (PMLA).

China’s Alibaba Group has a stake in One 97 Communication. The ED recently served notices to crypto exchanges CoinDCX, WazirX and CoinSwitch Kuber. These exchanges will be investigated in cases of money laundering and violation of foreign exchange law. Apart from ED, authorities related to Foreign Exchange Management Act (FEMA) will also be part of the investigation.

A CoinSwitch spokesperson told Gadgets 360, “The crypto segment is an early-stage industry and has great potential. We have received inquiries from various government agencies. Our approach has always been one of transparency.” Media reports suggest that the ED wants to know how crypto exchanges work in the country. Both CoinDCX and WazirX claim to comply with the laws of the country and are ready to cooperate with law enforcement agencies. The crypto segment in the country is already facing difficulties due to the volatility of the market and the implementation of new tax rules. This investigation may further reduce the trading volumes of these exchanges. Profits from Virtual Digital Assets (VDA) were taxed at 30 per cent from April this year.