Enforcement Directorate (ED), an Indian government-owned agency, has frozen the cryptocurrency exchange, Vauld. The exchange’s crypto and bank assets worth INR 370 crore or $46,439.181 have been frozen.
Last month, Vauld halted all withdrawals and deposits on its platform as the exchange and nine others are currently being investigated by the Indian law enforcement agency.
The agency announced on Friday that it has conducted a series of searches at various premises of the Bangalore-based Yellow Tune Technologies and has issued a directive to freeze the tech company’s payment gateway and bank balances.
Flipvolt Technologies has also received the agency’s ban. Its crypto balances have also been frozen as the two agencies currently have a total of 370 crore rupees worth of assets frozen. The company which specializes in crypto borrowing, trading and lending is Vauld’s entity, a Singapore-headquartered company registered in India.
ED alleged that the frozen assets were deposited into Yellow Tune Technologies’ INR wallets with Flipvolt Technologies by 23 entities. It claimed that the assets were “proceeds of crime derived from predatory lending services.”
Elaborating further, the agency alleged that “Yellow Tune, by using the assistance of Flipvolt crypto exchange … assisted the accused fintech companies in avoiding regular banking channels, and managed to easily take out all the fraud money in the form of crypto assets.”
Among other things, Flipvolt was accused of having “very lax KYC (Know-Your-Customers) norms, no EDD (Enhanced Due Diligence) mechanism, no check on the source of funds of the depositor, no mechanism of raising STRs (Suspicious Transaction Reports).”
The agency concluded that “Therefore, equivalent movable assets to the extent of Rs 367.67 crore lying with Flipvolt crypto exchange in the form of bank and payment gateway balances worth Rs 164.4 crore and crypto assets lying in their pool accounts worth Rs 203.26 crore are frozen under PMLA, 2002, till complete fund trail is provided by the crypto exchange.”
In a chat with Businesstoday, Flipvolt assured its users and the general community explained that “We are investigating the matter. We kindly request your patience and support. We will keep you updated as soon as we have more information on this.”
The Economic Times recently reported that ED also probed nine other Cryptocurrency exchanges for the same offence.