Indian Enforcement of Directorate (ED) has announced that it has frozen the financial-accounts of Bengaluru based financial services company Yellow Tune technologies, of which, some were held by Flipvolt cryptocurrency exchange, Indian branch of Singapore based Vauld, according to Cointelegraph. This move is aimed at an ongoing-investigation into money laundering by China-based instant loan companies, and is the second time within this week that the body took action in the cryptocurrency space.
As stated by Cointelegraph, the financial regulator announced that it froze Yellow Tune’s bank balances, payment gateway balances and balances in the Flipvolt cryptocurrency exchange for a total of Rs 3.7 billion, or $46.4 million after it was found that the company was a shell entity incorporated by two Chinese nationals through the use of pseudonyms. Going by various accounts, ED spent three days searching premises associated with Yellow Tunes, from which ED found that 23 entities had deposited funds into Yellow Tune’s Flipvolt wallets that were further transferred out of the country. The ED called those funds as “nothing but proceeds of crime derived from bad lending practices.”
Moreover, Cointelegraph mentioned that citing India’s Prevention of Money Laundering Act, 2002, ED froze funds in Flipvolt’s accounts which was in correlation with the sums transferred from Yellow Tune’s wallets to foreign wallets. Furthermore, the Singaporean exchange allowed 30% of its staffers to leave in June, and stopped withdrawals from its account at the starting of July. Through granting of protection from its Singapore creditors, it was granted three-month moratorium. Earlier this week, ED had frozen accounts worth $8.1 million funds of the cryptocurrency exchange WazirX, and was investigating at least nine more exchanges with ties to Chinese-backed instant loan companies. ED, through its latest communique, stated that its investigation of the case is still a work-in-progress.
(With insights from Cointelegraph)