Vauld’s Cryptocurrency Balance Freeze: Indian Saga
- on Aug 14, 2022
The cryptocurrency accounts of Bengaluru-based Yellow Tune Technologies, a financial services provider, have been blocked, according to an announcement from India’s Enforcement Authority (ED) on Friday. Flipvolt, Vauld’s Indian division of Singapore, held some of the accounts. The action relates to an ongoing investigation into money laundering by instant loan companies with ties to China. The organization has spoken to the cryptosphere about it twice this week.
After determining that Yellow Tune was a front company formed by two Chinese nationals using pseudonyms, the financial watchdog declared it froze the company’s bank balances, payment gateway balances, and Flipvolt cryptocurrency exchange balances totaling 3.7 billion rupees, or $46.4 million. Newspaper reports claim that the ED spent three days researching locations connected to Yellow Tunes.
The ED uncovered 23 entities that put money in Yellow Tune’s Flipvolt wallets before sending it elsewhere. The ED harshly criticized Flipvolt for the way the company handled the money. The agency further stated,
“Lax KYC [Know Your Customer] standards, loose regulatory control to allow transfers to foreign wallets without asking for a reason/declaration/KYC, not registering transactions on Blockchains to reduce costs, etc., have resulted in Flipvolt not being able to report missing crypto assets. He made no sincere effort to trace these crypto assets.
Cryptocurrency exchanges suspected by ED
India’s Law Enforcement (ED) Directorate is investigating cryptocurrency exchanges that may have handled transfers of investigated businesses to foreign wallets totaling over 10 billion rupees, or nearly 130 million dollars. At least ten cryptocurrency exchanges are apparently involved.
However, local publications said WazirX, a cryptocurrency exchange, had its bank account suspended.
In a case involving quick loans, organizations under investigation are alleged to have transacted up to 1 billion rupees ($1.3 million), or $1.3 million, in the names of people who had nothing to do with the money. These companies frequently had ties to China. Although AML and Know Your Customer procedures indicated that the transactions were suspicious, no enhanced due diligence or suspicious transaction notification was submitted to the ED.
Additionally, WazirX bank accounts containing 647 million rupees ($8.1 million) were frozen by the ED. claiming that around 16 fintech companies under investigation for money laundering have received aid from the exchange.