PhonePe, Easebuzz under investigation in Rs 500 crore investment scam linked to Hibox app

The Delhi Police's cyber security cell, the Intelligence Fusion and Strategic Operations (IFSO) unit, has launched an investigation into payment aggregators PhonePe and Easebuzz for their alleged negligence in opening merchant accounts linked to a ₹500 crore investment scam. The scam, which defrauded over 30,000 victims, revolved around the Hibox mobile application, which falsely promised high returns with daily interest rates ranging from 1% to 5%, according to the IFSO unit.

The probe is looking into whether the platforms failed to follow Reserve Bank of India (RBI) guidelines while setting up virtual merchant accounts or if there was any active involvement in the scam. “Apps like PhonePe and others have not followed the RBI guidelines while opening virtual merchant accounts, and are being probed to find out whether this was a mistake or if they were actively involved,” said Hemant Tiwari, Deputy Commissioner of Police for IFSO, in an interview with *Business Standard*.

IFSO, which specialises in investigating cybercrime in coordination with other agencies, stated that the potential involvement of employees from these payment platforms is not being ruled out. The investigation is ongoing, and no formal response was received from PhonePe by the time of reporting.

In a statement Easebuzz, "The merchant in reference is proactively blocked by Easebuzz platform in the month of July 2024 itself prior to the investigation by authorities. Moreover, Easebuzz has filed the Suspicious Transaction Report (STR) under the Financial Intelligence Unit, India (FIU) reporting norms immediately on receipt of our internal transaction monitoring system alerts in place and has blocked the merchant from transacting as per our company compliance policies. Further, Easebuzz is confident in its merchant onboarding and due diligence policy and necessary details of the merchant (KYC details, Transaction ledger and others documents) as required by the authorities have been duly submitted. Easebuzz ensures to remain compliant and cooperate with the authorities in the investigation process against the merchant."

In addition to these platforms, around 20 other firms are under scrutiny for allegedly laundering money connected to the scam. Tiwari indicated that these companies would likely be referred to the *Enforcement Directorate* for further investigation.

The scam gained traction through promotions by popular social media influencers and YouTubers. IFSO has issued notices to influencers such as Abhishek Malhan, Elvish Yadav, Lakshay Choudhary, and Purav Jha, requesting their cooperation in the investigation. “Many victims were drawn in through the promotion of the app by popular social media influencers and YouTubers,” the IFSO stated.

The Delhi Police have consolidated over 127 complaints related to the Hibox app and have arrested the main accused in the case. So far, ₹18 crore has been recovered from four bank accounts tied to the scam, with further investigations expected to uncover additional funds.