Indian forex authorities investigate gambling payment company Coda • The Register

India’s foreign exchange regulator, the Enforcement Branch, has investigated Singapore-based Coda Payments in an ongoing operation related to the Prevention of Money Laundering Act (PMLA) of the country.

Coda Payments provides services to game developers, app developers, and content streamers, who turn to it to monetize users who may not have credit cards or feel comfortable to use them online. The Singapore-based company counts Activision Blizzard, Riot Games and dating app Tinder among its clientele, with games such as Garena Free Fire, Teen Patti Gold and Call of Duty.

Investors recently sent $690 million to the company – a vote of confidence that it can improve on the billions of dollars it is already expected to process annually, and in its recently established digital asset marketplace.

Management accused him of making unauthorized deductions from user accounts and possibly bribing young people.

“Game developers like Garena and Coda Payments India have intentionally designed the payment mechanism in such a way that after the first successful transaction, a notification pops up asking for permission to make further payments without any authentication, [PDF] management said in a press release. The agency added that children in particular do not fully understand the implications of clicking on the pop-up and did so “routinely”, which then cleared future payments without further interaction or warning.

The raid, however, opened a Pandora’s box. Indian authorities say they discovered that the Singapore branch of Coda was just a way to transfer funds out of India.

Management alleged that the India-based company was “collecting money in the name of selling digital content and handing it over to its parent company in Singapore in the name of selling and buying digital content. However, the The entire operations of Codashop, which sells the tokens, are handled by Coda Singapore; there is no actual sale or purchase of digital content by [Coda India].”

The Indian branch reportedly collected $349 million, including $277 million from overseas, retaining some for tax payments and nominal profits. Indian authorities then froze all assets of Coda India, equivalent to $8.4 million.

Coda Payments reportedly cooperated with the investigation and called the allegations “baseless” and a “misunderstanding.”

“Coda’s operations in India have been fully compliant with the law,” the company said.

Coda Payments said The register its Indian operations “have been fully compliant with the law and we are cooperating with the Enforcement Directorate’s investigation.”

“These allegations, while baseless, provide an opportunity to clarify this misunderstanding around the nature of Coda’s business.”

The company says the misunderstanding stems from the fact that it does not process payments.

“Widely seen on e-commerce platforms and online marketplaces, end users pay for their purchases using payment methods such as e-wallets, UPI, online banking, and debit cards. credit and debit,” the company explained.

“These payments are not processed by Coda, but by the operator of the selected payment method, and in accordance with the Reserve Bank of India’s Master Direction on Digital Payment Security Controls, end-user authentication is the responsibility of relevant payment service providers. We continue to work closely with our payment provider partners to ensure security and compliance to protect our users.” ®

About Matthew R. Dailey

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