In the recent news, India’s anti-money laundering agency has frozen assets worth $46.4 million from the local entity of Vauld for enabling “crime-derived” returns from predatory lending firms in the latest money-laundering investigation for the crypto exchange that filed for protection from creditors last month.
The Money-Laundering Investigation Discovered a 3.7 Billion Indian Rupees Deposited Amount
Flipvolt Technologies, the India-registered entity of Singapore-headquartered Vauld, was used to deposit 3.7 billion Indian rupees by 23 entities, including non-banking financial companies and fintech firms, into the wallets controlled by Yellow Tune Technologies, the Enforcement Directorate said Friday of its ongoing money-laundering investigation.
The agency managing the money-laundering investigation said that the Indian entity, Vauld maintains “very lax KYC norms, no EDD mechanism, no check on the source of funds of the depositors, no mechanism of raising STRs, etc,” factors that led the accused firms to “avoiding regular banking channels” and able to “easily take out all the fraud money in the form of crypto assets.” Vauld’s India entity failed to provide the agency with a complete trail of crypto transactions made by Yellow Tune and also could not supply KYC details of the wallets, ED said.
“Lax KYC norms, loose regulatory control of allowing transfers to foreign wallets without asking any reason/declaration/KYC, non-recording of transactions on Blockchains to save costs, etc, has ensured that Flipvolt is not able to give any account for the missing crypto assets,” it added (PDF). “It has made no sincere efforts to trace these crypto assets. By encouraging obscurity and having lax AML norms, it has actively assisted M/s Yellow Tune in laundering the proceeds of crime worth Rs 370 Crore using the crypto route.”
Vauld’s Assets Are Frozen Until a Complete Fund Trail Has Been Submitted
The agency said it has frozen assets from Vauld’s India entity till it provides a complete fund trail. Vauld, which suspended its customers from withdrawing, trading, and depositing on its eponymous platform last month, recently filed for bankruptcy and reportedly owes creditors $363 million, according to news outlet The Block, which cited legal documents it obtained. The startup counts Coinbase Ventures, Pantera Capital, and Peter Thiel-backed Valar Ventures among its backers.