ED freeze on Rs 370 crore bank assets 'unfortunate': Crypto firm Vauld

As many as 10 crypto exchanges were under the lens of the ED for their alleged involvement in money laundering of around Rs 10 billion.

Published: 13th August 2022 05:33 PM  |   Last Updated: 13th August 2022 05:33 PM   |  A+A-

Enforcement Directorate (File Photo | PTI)

Enforcement Directorate used for representational purpose only. (File Photo | PTI)


NEW DELHI: A day after the Enforcement Directorate (ED) froze crypto lending platform Vauld's bank assets worth Rs 370 crore over its "predatory lending practices", the company on Saturday termed the action "unfortunate".

The ED had conducted searches at various premises of Yellow Tune Technologies Pvt Ltd in Bengaluru and froze assets belonging to Flipvolt crypto exchange which runs the Darshan Bathija-led Vauld.

Vauld, which last month suspended all withdrawals, trading and deposits on its platform owing to "financial challenges", said that despite extending its cooperation, "the Enforcement Directorate has proceeded to pass a freezing order, pursuant to which crypto assets in the pool wallets of the company have ordered to been frozen to the extent of approximately Rs 2,040 million".

"The freezing order of the Enforcement Directorate is specific to that one customer that availed our services for a brief period of time, whose account we subsequently deactivated. We respectfully disagree with the freezing order," said Vauld.

The company said that like several other players offering crypto services in India, it had received a summons from the ED office in Hyderabad in July, "seeking certain information/documents".

"In due compliance with the summons, we fully cooperated with the Enforcement Directorate and provided all the required information/documents," said the crypto company.

The ED had said in its statement that after the criminal investigation began, many of these fintech apps have shut shop and diverted huge profits earned using this modus operandi.

"While doing fund trail investigation, the ED found that a large amount of funds to the tune of Rs 370 crore was deposited by 23 entities, including accused NBFCs and their fintech companies into the INR wallets of Yellow Tune Technologies held with crypto exchange Flipvolt Technologies Private Ltd," it said.

These amounts were nothing but proceeds of crime derived from predatory lending practices, according to the agency. Vauld said that it follows strict KYC requirements in every country, including India.

"We are seeking legal advice on our best course of action in order to protect the interests of the company, its customers, and all the stakeholders," it added.

Last week, the ED froze bank assets of crypto exchange WazirX worth Rs 64.67 crore. The world's largest crypto exchange Binance disowned the Nischal Shetty-run crypto platform WazirX, saying it was removing the off-chain fund transfer channel between WazirX and Binance.

As many as 10 crypto exchanges were under the lens of the ED for their alleged involvement in money laundering of around Rs 10 billion.


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