The ED froze Rs 370 Crore in cryptocurrency exchange bank accounts.

According to authorities with knowledge of the situation, the Law Enforcement (ED) Directorate has blocked Rs 370 crore from the bank accounts of a cryptocurrency exchange which is under investigation for allegedly laundering money. money from companies accused of making illicit loan requests. The name of the trade was kept secret by officials.

In response to Management’s assessment of the enforcement of its KYC and AML processes and the resulting freeze of its bank assets, cryptocurrency lending platform Vauld issued a statement expressing its disagreement.

This is the second time this month that the bank accounts of a cryptocurrency exchange have been blocked by central authorities. ED said in a press release last week that it recently raided one of the directors of Zanmai Labs, which controls popular cryptocurrency exchange WazirX, and also ordered the funds frozen. banks totaling 64.67 crores.

It is unfortunate that, despite our offers of cooperation, the Enforcement Directorate (ED) went ahead and issued a freezing order that requires the company’s crypto assets, valued at over of 2,040 million rupees, be frozen. The blocking order only applies to the single customer who has used our services for a limited period of time before having their account cancelled. We respectfully oppose the order freeze,” Vauld said in the press release.

“We adhere to strict KYC guidelines in all countries including India.” To protect the interests of the company, its customers and other stakeholders, we seek legal advice on the appropriate course of action. “To ensure that we continue to be a secure environment for users to transact and own cryptocurrencies, we have cooperated fully with the Enforcement Branch and will continue to do so,” he said. declared.ed raids enterprise bengaluru, freezes rs370 crore of assets held in crypto exchange

According to those familiar with the situation, the agency is investigating at least 10 cryptocurrency exchanges for allegedly laundering over a thousand crores from the companies charged in the fast loan app case. This money was found to be proceeds of crime.

“We adhere to strict KYC guidelines in all countries including India.” To protect the interests of the company, its customers and other stakeholders, we seek legal advice on the appropriate course of action. “To ensure that we continue to be a secure environment for users to transact and own cryptocurrencies, we have cooperated fully with the Enforcement Branch and will continue to do so,” he said. declared.

The Law Enforcement (ED) Directorate announced on Friday that it is freezing its bank accounts, payment gateway balances and cryptocurrency balances totaling Rs 370 crore because Vauld, a lending platform cryptocurrency, allegedly helps predatory lending apps. At the time of the freeze, payment gateway balances were Rs 164.4 crore and the value of crypto assets in their pool accounts was Rs 203.26 crore.

The ED searched several locations of Yellow Tune Technologies Private Limited in Bangalore, and the seized assets belonged to Flipvolt, the cryptocurrency exchange that runs Vault. The action was taken precisely a week after WazirX’s bank assets worth Rs. 64.67 crores were frozen on Friday last week in a related matter.

“Many of these fintech apps were shut down and transferred huge revenue through this method when the criminal investigation began.” The ED found during an investigation into the funds that 23 organizations including the accused NBFCs and their fintech firms placed a sizable sum of money totaling Rs 370 crore in the INR wallets of Yellow Tune Technologies held with cryptocurrency exchange Flipvolt Technologies Private Limited. According to an ED statement, “these sums were nothing more than the proceeds of crime resulting from predatory lending practices.”Enforcement management freezes crypto vauld platform assets worth nearly Rs.  370 Crores: Details |  means Hindi |  the nature of journalism

He claimed that the cryptocurrency he had just acquired was sent to many unidentified foreign wallet addresses. Between August 8 and 10, many Yellow Tune Technologies sites were searched, but neither the recipients’ wallets nor the company’s beneficial owners could be found.

According to the ED, “This front company is discovered to have been set up by Chinese nationals Alex and Kaidi (real names unknown) with the active connivance of consenting AC/CSS, and the bank accounts were opened in the names of bogus administrators “.

Sources told ET that the investigation uncovered instances in which the accused firms approached exchanges to buy cryptocurrency for over $100 million and then sent the coins to foreign accounts. They claimed that the exchanges did not perform additional due diligence or even disclose suspicious transactions. However, WazirX said this week that it complies with KYC regulations. According to a spokeswoman, he maintains a stance of zero tolerance for any criminal activity.

According to a source with knowledge of the situation, the accused app-based lending companies allegedly used fintech to receive and disburse money. According to the source, revenue increased and the remaining money was then transferred via cryptocurrency out of the country, adding another layer to finances.

The accused fintech companies allegedly avoided using traditional banking channels and were able to easily withdraw all fraud money in the form of cryptocurrency assets thanks to Flipvolt’s allegedly lax KYC standards, loose regulatory oversight and the authorization of transfers to foreign portfolios without any justification. , declaration or KYC.

Vauld’s setback comes as it grapples with a liquidity crunch that forced it to halt withdrawals on July 4 and also suspend operations. The company announced on July 5 that it had signed an indicative contract to be purchased by London-based cryptocurrency lender Nexo.

The official explained that while the exchange may have helped with KYC but lacked information about the defendant’s crypto-to-crypto transfer, it was impossible to track these crime profits. In addition, the company is mired in legal cases following letters of formal notice from creditors. Vauld said in July that his group company had assets worth about $330 million and liabilities totaling about $400 million. The company is currently serving a three-month moratorium to assess its options for resolving the financial situation and repaying creditors.Longtime Bitcoiner Dan Says This “Crypto Winter” Won't Be As Harsh As Others |  techcrunch

According to the authorities, thousands of such quick loan application agencies are being investigated by several institutions, including the ED, the Income Tax Department, the Ministry of Commercial Affairs and the police, in many places. According to a senior government official, “in at least 50% of these cases, leadership was transferred from Indians to Chinese citizens, or they obtained funding from their Chinese relatives.” “Cryptocurrency exchanges were the second point of failure for the overall instance of the lending app. Money first appeared in bank accounts.” Since moving from banks to cryptocurrency exchanges. currency, it didn’t stop at the banking level,” said a business executive who was aware of the situation.

Edited by Prakriti Arora