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India’s ED Raids Coda Payments

The Enforcement Directorate (ED) of India raided the premises of Coda Payments India (the company behind the popular Codashop marketplace) as part of an ongoing Free Fire investigation. All Coda accounts reportedly holding INR 68.53 crore ($8.36 million) were frozen. Against Coda Payments India Pvt. several First Investigation Reports (FIRs) were filed. ltd and Garena Free Fire at the same time.

Coda Payments claims to work with multiple game makers including Tencent, EA, NetEase Games, Krafton, Activision Blizzard, Garena and more. Its Codapay API service allows game publishers to accept over 300 payment methods through in-game or web purchases.

What is the ED and why is it studying Free Fire?

The Directorate of Enforcement is a law enforcement and business intelligence agency responsible for enforcing business laws and combating financial crime in India. It is part of the Treasury, Treasury and Government of India.

According to a report by LiveMint, the ED stated: β€œIt 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.”

The ED revealed that Coda Payments resorted to unauthorized deductions from end users in the name of monetization and revenue generation. It has also been claimed that both Garena and Coda Payments are working together to trick players into charging them without authentication. Coda Payments allegedly asked permission to make all subsequent payments without authentication after players completed a successful transaction.

Since kids are easy targets for the company, they inadvertently gave permission to these apps. Unlike Coda Payments, which has incorporated a company in India (Coda Payments Pvt. Ltd.), Garena, the publisher of Free Fire, has not and operates out of Singapore.

Coda Payments India Pvt. ltd collects money in the name of selling digital content and remits the money to its parent company in Singapore. The company’s accounts have been frozen.

Free Fire was banned along with over 50 apps in February. At the time, it was believed that the app was banned in connection with other apps that allegedly sent data to Chinese servers. The Indian government did not disclose the reason behind the game’s ban, but since the ED is cracking down on the game, alleged money laundering could be the reason behind the game’s ban. Free Fire Max, another version of Free Fire with better graphics, is still available in India at the time of writing.

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