The assets of the cryptocurrency exchange Vauld have been frozen by India’s Enforcement Directorate (ED).
In a latest move, linked to investigation into China-linked instant loan companies, Indian Enforcement Directorate, has frozen the accounts of Financial Service company Yellow Tune Technologies.
After determining that Yellow Tune was a shell company formed by two Chinese nationals using aliases, the financial watchdog declared it was freezing the company’s bank balances, payment gateway balances, and balances in the Flipvolt cryptocurrency exchange for a total of 3.7 billion rupees, or $46.4 million.
Raising its suspicion on Flipvolt and after taking stern action, the agency said, “Lax KYC [Know Your Customer] norms, loose regulatory control of allowing transfers to foreign wallets without asking any reason/declaration/KYC, non-recording of transactions on Blockchains to save costs etc, has ensured that Flipvolt is not able to give any account for the missing crypto assets. It has made no sincere efforts to trace these crypto assets.”
ED has called these funds as proceeds of crime derived from predatory lending practices.
Additionally, citing India’s Prevention of Money Laundering Act of 2002, The ED froze funds in Flipvolt’s accounts equal to the amounts it transferred from Yellow Tune’s wallets to overseas wallets.
Trouble for Vauld doesn’t seem to end. The cryptocurrency lender, filed for bankruptcy protection from its Singaporean creditors in July.
That occurred a few days after Vauld temporarily halted withdrawals from its platform due to a decline in the market that resulted in significant withdrawals.