The Indian Directorate of Enforcement until the exchange could give an explanation for the illegal gains it sent outside.
The financial accounts of Bengaluru-based Yellow Tune Technologies, a provider of financial services, have been blocked, according to a Friday announcement from India's Directorate of Enforcement (ED). Flipvolt, the Indian division of Singapore's Vauld, held some of the accounts. The action is related to an ongoing investigation into money laundering by instant loan companies with ties to China. The organisation has intervened in the cryptosphere in relation to that matter twice this week.
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. Reports claim that the ED spent three days searching locations connected to Yellow Tunes.
The ED discovered 23 entities that had put money into Yellow Tune's Flipvolt wallets before sending it elsewhere. The ED gave Flipvolt harsh criticism for how company handled the money.
In accordance with India's Prevention of Money Laundering Act of 2002, the ED frozen funds in Flipvolt's accounts equal to the sums it transferred from Yellow Tune's wallets to foreign wallets "until whole fund trail is disclosed by the crypto-exchange." In the words of the ED, these funds "aren't anything more than the proceeds of crime emanating from predatory lending practises."
The most recent piece of bad news for Vauld is the attachment of the Flipvolt funds. The Singaporean exchange reduced its workforce by 30% in June and stopped account withdrawals at the start of July. Later that month, it turned to Singapore for defence against its creditors. It was given a three-month moratorium, which is comparable to Chapter 11 bankruptcy in the United States.
This week, it was revealed that the ED had frozen accounts containing $8.1 million of the cash belonging to the cryptocurrency exchange WazirX and was looking into at least nine additional exchanges linked to Chinese-backed rapid loan businesses. The ED stated in its most recent statement that the case is still under investigation.
