Vauld Cries Foul After ED Questions Its KYC And Freezes Accounts

Vauld, a Singapore-based crypto platform, said it disagrees with the Enforcement Directorate perspective on its KYC and anti-money laundering procedures and the subsequent freeze on its bank assets.

"It is unfortunate that despite extending our cooperation, the Enforcement Directorate (ED) 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 204 crore. The freezing order 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," Vauld said in the statement.

The Enforcement Directorate on Friday said that it has attached Rs 370 crore worth deposits — invested in bank, payment gateway and crypto accounts — of a Bengaluru-based 'shell' company incorporated by two Chinese nationals who left the country in 2020.

The agency stumbled upon the alleged illegal activities of the company during its ongoing money laundering probe against some dubious smartphone-based loan lending apps which are stated to be 'backed by' Chinese funds.

"While doing fund trail investigation, ED found that deposits to the tune of Rs 370 crore were deposited by 23 entities, including accused NBFCs and their fintech companies into the wallets of Yellow Tune Technologies Private Limited held with crypto exchange Flipvolt Technologies Private Limited. These amounts were nothing but proceeds of crime derived from predatory lending practices," the agency said in a statement.

Earlier this month, the agency froze bank deposits of Rs 64.67 crore of cryptocurrency exchange WazirX. In July, crypto exchanges, including CoinDCX, CoinSwitch Kuber, and Unocoin, were served notices by the ED as part of its ongoing investigation into alleged instances of foreign exchange violations.