The Directorate of Enforcement in India declared on Friday to have terminated the financial accounts related to Yellow Tune Technologies (a financial services firm based in Bangaluru), a few among which were under the possession of a crypto exchange named Flipvolt (Singapore-based Vauld’s branch in India).

Flipvolt’s Funds Terminated by the Directorate of Enforcement

The respective step is associated with a continuous investigation dealing with money laundering conducted by the instant loan firms having connections with China. This counts as the 2nd time during the current week when the regulatory entity has moved ahead to take measures within the space of cryptocurrency.

It was declared by the financial regulator that the organization was halting the payment gateway-related balances and bank balances of Yellow Tune along with Flipvolt’s balances for a cumulative figure of up to 3.7B rupees (nearly $46.4M) following its decision that the platform operated as a shell body integrated on the behalf of a couple of Chinese citizens utilizing the pseudonyms. As per newspaper accounts, 3 days were spent by the ED while searching the premises linked with Yellow Tunes.

Twenty-three institutions were uncovered by the ED as having deposited assets into the Flipvolt wallet under Yellow Tune and then they were transacted external to the jurisdiction of India. The ED was precisely condemning the funds’ handling by Flipvolt.

The ED Labels the Funds as Criminal Proceeds

The watchdog stated that negligent compliance with the KYC requirements, careless regulatory management by permitting the transactions to foreign wallets while not asking for the needed information, and a failure in maintaining a record of the transfers carried out on blockchains, were the factors proving that Flipvolt cannot answer where the misplaced crypto asset is gone, as per the ED. It further mentioned that the crypto firm did not do any efficient endeavors to track down those crypto assets.

While referring to the Prevention of Money Laundering Act of 2002 in the Indian constitution, the agency halted the funds present in the accounts of Flipvolt equivalent to the cumulative amounts transacted by it from the wallets of Yellow Tune to the external wallets until the exchange provides a thorough fund trail. The ED categorized the suspended funds as the criminal operations’ earnings taken from predatory lending.