The assets were kept in wallets on the Flipvolt cryptocurrency exchange, bank accounts, and payment gateway balances.
According to the Enforcement Directorate (ED), assets worth Rs 370 crore that belonged to a Bengaluru-based company connected to the fast loan apps case have been attached. The assets were kept in wallets on the Flipvolt cryptocurrency exchange, bank accounts, and payment gateway balances. The Indian division of Singaporean crypto lender Vauld is called Flipvolt.
The ED claimed that over the course of three days beginning August 8, it had searched a number of locations connected to Yellow Tune Technologies Pvt. Ltd.
In response to the demise of the TerraUSD stablecoin and its companion token Luna, Vauld halted all deposits and withdrawals on its platform in July. Later on in the same month, Vauld signed an indicative term sheet to be fully purchased, subject to due diligence, by Nexo, another cryptocurrency lender. Peter Thiel, the founder of PayPal, led Valar Ventures in a $25 million funding round for Vauld in July of last year.
Emails and messages addressed to the exchange did not immediately evoke a response.
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According to the ED, its investigation revealed Yellow Tune was a shell company with Chinese nationals on its board and that money to the tune of Rs 370 crore was transferred into Yellow Tune's Indian rupee wallets by 23 entities, including the alleged non-banking financial companies (NBFCs) and their digital payment arms.
“These amounts were nothing but proceeds of crime derived from predatory lending practices. Cryptocurrency so purchased was transferred to various unknown foreign wallet addresses,” the ED said in a statement.
The agency claimed that between August 8 and August 10, it searched many Yellow Tune Technologies locations in an attempt to track down the owners of the business and the recipients of the wallets, but was unable to do so.
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“It is found that this shell entity was incorporated by Chinese nationals… with the active connivance of willing CAs/CSs and the bank accounts were opened in the name of dummy directors,” the agency said.
“These Chinese nationals left India during December 2020 and later the internet banking credentials, digital signatures of dummy directors, etc. were shipped abroad and used by the said Chinese nationals to launder the proceeds of crime.”
The ED has frozen the bank accounts of a crypto exchange twice this month. Last Friday, the agency announced in a press statement that it had recently conducted searches against a director of Zanmai Labs, which operates the well-known cryptocurrency exchange WazirX, and had given the company an order to freeze assets worth Rs 64.67 crore in its bank accounts.
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