In conjunction with a money laundering investigation, the Enforcement Directorate (ED) reported on Tuesday, September 27, that it searched three locations connected to the gaming top-up platform Coda Payments India. Amid revelations that the platforms took unauthorized withdrawals from the accounts of players of online games, the nation’s financial crime-fighting agency said that it had opened an investigation into the corporations.
Coda makes it possible to make international payments for virtual content like Call of Duty, Garena Free Fire, and Teen Patti Gold.
Allegations
The raids were carried out in response to many FIRs filed against Coda Payments India Pvt Ltd and Garena Free Fire. The ED searched the Coda Payments India offices on Tuesday.
Furthermore, it is claimed that game producers like Garena and Coda Purchases India Pvt Ltd deliberately created the payment system such that following the first successful transaction, a notification appears asking for consent to make additional payments without authentication.
Young children end up clicking on the notification without reading it properly which results in their authorizing all future purchases without additional verification, according to the ED.
Statement by ED
The ED released an official statement saying, “It is alleged that Coda Payments India Pvt. Ltd. which facilitates and collects payments from end users (mostly unsuspecting children) of games like Garena Free Fire, Teen Patti Gold, Call of Duty etc, in the name of monetising and generating revenue for web and game publishers, is resorting to unauthorized deductions from the end users of these games in the name of selling digital tokens to end users which are used by the end users to enhance their playing experience in the game.”
Findings
The search revealed that Coda Payments India Pvt Ltd was merely established to serve as the agent of Coda Payments Singapore Pte Ltd for the purpose of collecting money from users and sending it to the parent business. However, the entire operation of Codashop, which sells the tokens, is being controlled by Coda Singapore alone. There is no sale or purchase of digital content by CPIPL. Instead, Coda Payments India Pvt. Ltd. was getting money under the guise of selling digital content and sending it to its parent company in Singapore. All of Coda’s accounts, with a combined balance of 68.53 crores, were also frozen by the ED.
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