The Enforcement Directorate (ED) of India announced on Friday that all the financial accounts of Yellow Tune Technologies, a financial services company based in Bengaluru have been frozen because of an ongoing investigation of an alleged money laundering case that is connected to some instant loan firms with a firm link with China. This action from the enforcement agency will be the second of its kind this week regarding the case in the crypto space.
The financial accounts of Yellow Tune Technologies frozen include its bank balances, balances in the Flipvolt crypto exchange (worth 3.7 billion Indian rupees, approx. $46.4 million), and its payment gateway balances. This action came after the agency concluded that the firm is incorporated by Chinese nationals, who are using pseudonyms.
ED Condemned and Punished Flipvolt for Loose Regulatory Control
It was reported in the newspaper accounts that the Enforcement Directorate used about three days to search all the premises associated with the company. Also, the agency uncovered about 23 entities that used the Flipvolt wallets belonging to Yellow Tunes to move money outside the country. To this end, the agency condemned the way Flipvolt handled the funds, and referenced loose regulatory control, which allowed funds transfer without adequate Know-Your-Customer (KYC) or declaration protocol.
ED, referring to the 2002 Prevention of Money Laundering Act of India, froze the funds in Flipvolt accounts equivalent to the amount processed to foreign accounts for Yellow Tune until the exchange provides a comprehensive trail of the funds.
More Woes for Vauld
This action on Flipvolt is nothing but another bad news for Vauld which is currently undergoing financial trauma. In June, the Singaporean exchange reduced its workforce by 30%, and in July, all withdrawal process from its accounts was halted. Later in July, the crypto lender applied for protection from all its creditors in the country. To that effect, Vauld got a moratorium up to three months in the similitude of the United States Chapter 11 on Bankruptcy.
Earlier this week, it was reported that the Enforcement Directorate has frozen an account belonging to WazirX, which is holding about $8.1 million, and the agency has initiated an investigation on about nine other crypto exchanges related to the instant loan firms having ties with China.
In the last communique received from the ED, the investigation of these exchanges is still ongoing, and the outcome will be made known in due time.
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