India’s Enforcement Directorate (ED) on Thursday froze $46.5 million (roughly Rs. 369.5 crore) in assets at the struggling Singapore-based cryptocurrency exchange Vauld. The country’s economic crime unit on Friday said in a press release that the frozen assets were parked in bank accounts, payment gateway balances, and wallets on the Flipvolt crypto exchange. The ED said it had conducted searches at several premises linked to the company, Yellow Tune Technologies Pvt. Ltd, over three days starting August 8.
“These amounts were nothing but proceeds of crime derived from predatory lending practices. Cryptocurrency so purchased was transferred to various unknown foreign wallet addresses,” stated the ED in a press release.
“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.
The enforcement agency said the frozen assets that belong to Vauld’s India entity would remain held until it provides a complete fund trail.
It is worth noting that Flipvolt is the Indian arm of Singaporean crypto exchange Vauld, which suspended all deposits and withdrawals on its platform in June, following the collapse of the TerraUSD stablecoin and its sister token Luna.
Last week, assets on WazirX totalling $8 million (roughly Rs. 63.5 crore) were frozen by the ED. WazirX is among the first crypto platforms and one of the biggest exchanges in India, with volumes exceeding $43 billion (roughly Rs. 3,41,658 crore) last year.
Vauld CEO Darshan Bathija, in an email issued to stakeholders last month, said the exchange has accrued liabilities totalling $400 million (roughly Rs. 3,178 crore) against assets of just $330 million (roughly Rs. 2,622 crore).
He attributed the gap as the result of mounting losses brought on by exposure to the TerraUSD drop as well as a decline in other significant cryptocurrencies like Bitcoin and Ether.
“We are investigating this matter, we kindly request your patience and support, we will keep you updated as soon as we have more information on this,” Vauld said in a statement sent to Business Today.
Vauld is already facing financial troubles and has halted withdrawals since July. The platform obtained a three-month moratorium extension from the Singapore High Court to explore different options a few days ago.