The Enforcement Directorate of India (ED) has launched a back-to-back investigation into several digital asset exchange platforms. Vauld, a Singaporean crypto exchange, recently came under the scrutiny of the anti-money laundering agency. The embattled Asian crypto lender Vauld, in a news release on Saturday, “respectfully disagrees” with the recent freezing of some of its assets by Indian authorities.
Last week ED froze bank assets worth Rs 370 billion (about $48 million) belonging to the troubled exchange, Vauld. The news comes a week after the account of one of Zanmai Lab’s directors at WazirX was frozen. The development comes as ED investigates at least 10 crypto exchanges for alleged money laundering of over $125 million.
On Friday, ED announced that it had frozen the financial accounts of Bangalore-based money services firm Yellow Tune Technologies. Flipvolt, a Singaporean Vauld Indian affiliate. The move is connected to an ongoing investigation into Chinese money-laundering operations linked to instant loans.
News have it that Vauld’s local entity was used by 23 predatory fintech and non-banking businesses to deposit millions of dollars into wallets under Yellow Tune Technologies’ control. WazirX is accused of assisting 16 suspected fintech businesses in laundering illicit loan applications. ED announced that it was restricting Yellow Tune’s bank accounts and payment gateway balances for a total of 3.7 billion rupees, or $46.4 million, in response to reports that the firm was a “shell entity” established by two Chinese individuals using aliases.
The ED’s report said Vauld’s Indian entity had extremely lax know-your-customer (KYC) standards. It also lacks a more thorough due diligence process, no check on depositors’ funding sources, and no method for reporting Suspicious Transaction Reports (STRs), among other things.
Vauld said that the crypto lender had handed over and followed the ED summons to supply documents to investigators. Vauld says that the freeze resulted from an account belonging to a former customer of the platform, which had since been closed. Based on the above, Vauld said that the company had done nothing wrong, and the entity was perplexed as to why it was handed such a heavy penalty. Vauld is seeking legal advice to pursue its best course of action to safeguard consumers and the firm.
January 31, 2020