India freezes Peter Thiel-backed Vauld’s $46m worth of crypto and bank assets – Regulation Bitcoin News

India freezes Peter Thiel-backed Vauld’s $46m worth of crypto and bank assets – Regulation Bitcoin News

India’s Enforcement Directorate (ED) has frozen crypto exchange Vaulda and bank assets worth around INR 370 crores ($46,439,181). Vauld stopped deposits and withdrawals last month. India’s law enforcement agency is reportedly investigating more than 10 cryptocurrency exchanges.

Indian authorities freeze assets of another cryptocurrency exchange

The Enforcement Directorate (ED), the law enforcement and economic intelligence agency of the Government of India, has frozen the assets of another cryptocurrency exchange.

Agency announced On Friday, it searched various premises of Yellow Tune Technologies in Bangalore and issued a freeze order on its bank balances, payment gateway balances and crypto balances of crypto exchange Flipvolt Technologies with a total asset value of 370 million rupees ($46,439,181). Flipvolt Technologies is the India-registered entity of Singapore-based Vauld, a cryptocurrency trading, borrowing and lending platform.

India freezes Peter Thiel-backed Vauld’s $46m worth of crypto and bank assets – Regulation Bitcoin News

The ED explained that around Rs 370 crore was deposited by 23 entities in Yellow Tune Technologies’ INR wallets held on the Flipvolt Technologies crypto exchange. These amounts were “proceeds of crime obtained through predatory lending practices,” authorities said, elaborating:

Yellow Tune, with the help of the Flipvolt crypto exchange… helped the accused fintech companies avoid regular banking channels, and managed to easily withdraw all the fraud money in the form of crypto assets.

The agency claimed that Flipvolt “has very weak KYC [know-your-customer] norms, without EDD [enhanced due diligence] mechanism, there is no verification of the source of the depositor’s funds, there is no mechanism for withdrawing STR [suspicious transaction reports].”

In addition, Flipvolt failed to provide a complete trail of crypto transactions made by Yellow Tune Technologies and was unable to provide any form of KYC of the counterparty’s wallet, the ED noted.

The authorities concluded that “encouraging ambiguities and a weak fight against money laundering [anti-money laundering] norms,” ​​the crypto exchange “actively assisted Yellow Tune in laundering 370 million rupees worth of criminal proceeds using cryptocurrency,” adding:

Accordingly, the equivalent movable assets of Rs 367.67 million lying on Flipvolt crypto exchange in the form of bank balances and payment gateways worth Rs 164.4 million and crypto assets lying in their accounts amounting to 203.26 million Rs, are frozen till 20 PM02 LA. the complete trail of the fund is provided by the crypto exchange.

Vauld’s website explains that “as soon as a user deposits funds into their Vauld wallet, they go to a centralized pool.” From this fund, funds are allocated for lending and trading. PMLA, 2002 is India’s Prevention of Money Laundering Act.

The crypto exchange told Businesstoday: “We are investigating this matter, we ask for your patience and support, and we will let you know as soon as we have more information about it.”

After stopping deposits and withdrawals last month, Vauld announced restructuring plan on the 4th of July due to the “financial challenges” it has faced in recent months. Defi Payments Pte Ltd., the entity that manages Vauld in Singapore, also applied for the sake of judicial protection from the initiation of court proceedings. The exchange is not currently licensed in Singapore.

In July last year, Vauld raised $25 million in Series A funding round for its India-based borrowing and lending platform. The round was led by Valar Ventures, an American venture capital fund co-founded by billionaire Peter Thiel. Pantera Capital, Coinbase Ventures, CMT Digital, Gumi Cryptos, Robert Leshner, Cadenza Capital and others also participated in the round.

Last week, ED announced that he froze the bank assets of Wazirx, a major crypto exchange in India. The authority detailed that it searched one of the directors of Zanmai Labs, which owns Wazirx, and issued a freeze order on the bank balances of the stock exchange amounting to INR 64.67 million.

The ED similarly explained that the action against Wazirx is part of a money laundering probe involving non-banking financial companies (NBFCs) and their fintech partners for “predatory lending practices in violation of the RBI [Reserve Bank of India] guidelines.”

Additionally, the Economic Times reported on Thursday that the ED did probing at least 10 cryptocurrency exchanges for allegedly laundering more than INR 1,000 crores. Crypto trading platforms allegedly failed to perform adequate analysis and failed to report suspicious transactions.

Tags in this story

ED, Directorate for Execution, feeze order, Flipvolt crypto exchange, freeze bank accounts, Peter Thiel, Freezing Vauld assets, Vauld crypto exchange, Vauld Indian Exchange, Vauld Singapore Stock Exchange, yellow technology melodies

What do you think about India freezing the bank accounts of cryptocurrency exchanges? Let us know in the comments section below.

India freezes Peter Thiel-backed Vauld’s $46m worth of crypto and bank assets – Regulation Bitcoin News

Kevin Helms

An Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

Image Credits: Shutterstock, Pixabay, Wiki Commons, lev radin

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