India’s Enforcement Directorate (ED) has frozen the crypto and bank assets of crypto exchange Wold worth around Rs 370 crore ($46,439,181). Wald halted deposits and withdrawals last month. The Indian law enforcement agency is reportedly investigating more than 10 cryptocurrency exchanges.
Indian authority freezes assets of another cryptocurrency exchange
The Enforcement Directorate (ED), a law enforcement and economic intelligence agency of the Government of India, has frozen the assets of another cryptocurrency exchange.
The agency announced on Friday that it has conducted searches at various premises of Yellow Tune Technologies in Bangalore and has issued an order to freeze its bank balances, payment gateway balances and crypto balances of FlipVolt Technologies’ crypto exchange, totaling Rs 370. crore is Rs. of property. Flipvolt Technologies is the India-registered unit of Singapore-headquartered Vault, a cryptocurrency trading, lending and lending platform.
The ED informed that around Rs 370 crore was deposited by 23 entities in the INR wallet of Yellow Tune Technologies held near the crypto exchange of Flipvolt Technologies. These amounts to “crime proceeds derived from predatory lending practices,” the authority said, detailing:
Yellow Tune… with the help of the FlipVolt crypto exchange assisted the accused fintech companies in escaping from regular banking channels, and managed to easily extort all fraudulent money in the form of crypto assets.
The agency alleges that FlipVolt has “very loose KYC” [know-your-customer] Norms, no EDD [enhanced due diligence] Mechanism, no check on the source of depositor’s funds, no mechanism to raise STR [suspicious transaction reports],
Furthermore, FlipVolt failed to provide full traces of crypto transactions conducted by Yellow Tune Technologies and could not supply any form of KYC to the opposite party’s wallet, the ED noted.
The authority concluded that “by encouraging ambiguity and loosening AML”. [anti-money laundering] Criterion,” the crypto exchange has “actively assisted Yellow Tune in legalizing proceeds of crime worth Rs 370 crore using cryptocurrency,” adding:
Therefore, movable assets equivalent to Rs 367.67 crore lying with FlipVolt crypto exchange as bank and payment gateway balance of Rs 164.4 crore and crypto assets worth Rs 203.26 crore in their pool accounts are frozen under PMLA, 2002 till date, As long as the complete fund trail is provided by the crypto exchange.
Vault’s website states that “as soon as a user deposits funds into their Vault wallet, it goes to a centralized pool.” From this pool, funds are allocated for lending and trading. PMLA, 2002, is the Prevention of Money Laundering Act of India.
The crypto exchange told Business Today: “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.”
After halting deposits and withdrawals last month, Wald announced a restructuring plan in recent months due to “financial challenges” on July 4. DeFi Payments Pte Ltd, which operates Wold in Singapore, has also applied for court protection from legal proceedings being initiated against it. The exchange is currently not licensed in Singapore.
In July last year, Wald raised $25 million in a Series A funding round for its India-based lending and lending platform. The round was led by Weller Ventures, a US-based venture capital fund co-founded by billionaire Peter Thiel. Pantera Capital, Coinbase Ventures, CMT Digital, Gumi Cryptos, Robert Leshner, Cadenza Capital and others also participated in the round.
Last week, the ED announced that it has frozen the bank assets of Wazirx, a leading crypto exchange in India. The authority elaborated that it conducted searches on one of the directors of Zanmai Labs, which owns Wazirx, and issued an order freezing the bank balance of the exchange to INR 64.67 crore.
The ED similarly explained that the action against Wazirx is part of a money laundering investigation involving non-bank financial companies (NBFCs) and their fintech partners for “predatory lending practices in violation of RBI”. [Reserve Bank of India] guidance. ,
Furthermore, The Economic Times reported on Thursday that the ED is probing at least 10 cryptocurrency exchanges for alleged laundering of over Rs 1,000 crore. The crypto trading platform reportedly did not take adequate precautions and failed to file suspicious transaction reports.
What do you think about cryptocurrency exchanges freezing bank accounts in India? Let us know in the comments section below.
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