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India Directorate of Enforcement seizes ₹3.70 billion of Vauld assets on money-laundering charges

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Joyashree Dey Follow

INDIA

Aug, 20 2022

Aug, 20 2022

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India’s Directorate of Enforcement (ED) accused Singapore-based Crypto Lender Vauld of money laundering charges after ?3.70 billion ($46.5 million) was seized from its local entity, Flipvolt Technology. 


On August 12, ED confirmed in a press release that it is investigating Vauld (Flipvolt Technologies) and Yellow Tune Technologies for allegedly facilitating illegal transfers through the crypto exchange.


ED has conducted searches at various premises of Bangalore-based M/s Yellow Tune Technologies Private Limited and has issued a freezing order to freeze its Bank balances, payment gateway balances, and Crypto Balances of Flipvolt Crypto-currency exchange adding up to Rs. 370 Crore worth of assets. 


As indicated by the regulator, under ED’s probe 23 entities had reportedly deposited Rs. 370 Crore into Yellow Tune’s crypto wallet, which was afterward shipped off foreign wallet addresses without following due process and raising dubious transaction reports (STRs). 


The statement confirmed: Yellow tune by using the assistance of Flipvolt Crypto-Exchange, which has very lax KYC norms, no EDD mechanism, no check on the source of funds of the depositor, no mechanism of raising STRs, etc., 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. 


The Indian Authority blamed the exchange for showing laxity in dealing with the case.  Failing to provide the authority with KYC details of the wallets, it couldn't account for crypto transactions made by Yellow Tune. 

It has made no sincere efforts to trace these crypto assets. By encouraging obscurity and having lax AML norms, it has actively assisted M/s Yellow Tune in laundering the proceeds of crime worth Rs 370 Crore using the crypto route. 


Subsequently, the Indian exchange owned by Vauld will forfeit the laundered amount until it gives further comprehensive details in defense of the charges against it. 



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Joyashree Dey

CBW - External Analyst

INDIA

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