Home Business ED raids Bengaluru company and freezes Rs 370 crore in assets held in crypto exchange

ED raids Bengaluru company and freezes Rs 370 crore in assets held in crypto exchange

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ED raids Bengaluru company and freezes Rs 370 crore in assets held in crypto exchange

The Law Enforcement Branch raided various premises of Yellow Tune Technologies Private Limited in Bengaluru regarding illegal loan applications and money laundering through cryptocurrencies.

ANI reported that the agency froze Rs 370 crore of company assets held with crypto exchange Flipvolt Technologies Private Limited.

The report further states that large sums of money earned through illegal lending have been deposited by 23 entities, including NBFCs and fintech companies, into Yellow Tune Technologies’ INR wallets.

According to the ED, the company sent the purchased cryptocurrency to various unknown foreign wallets. “The cryptocurrency so purchased was transferred to various unknown foreign wallet addresses. A search was conducted at various premises of Yellow Tune Technologies from August 8 to 10 to locate the beneficial owners of this company and that of the receiving wallets”, said the ED.

The owners of the company remain untraceable. This shell organization was formed by Chinese nationals Alex and Kaidi (real names unknown) with the cooperation of accountants and company secretaries. Bank accounts have been opened in the names of fictitious directors.

These Chinese nationals left India in December 2020. The agency said the bank’s internet credentials and digital signatures of fake administrators were shipped overseas and used to launder the proceeds of crime by Chinese individuals.

The ED could trace Rs 2.31 crores of Yellow Tune assets and issued the freezing order under the Prevention of Money Laundering Act 2002.

With the help of Flipvolt, known for its lax KYC standards and checks on depositor funding sources, Yellow Tune helped the accused fintech companies avoid regular banking channels and successfully procured the fraud proceeds under the form of crypto assets, ED said.

Additionally, Flipvolt failed to share the ledger of crypto transactions made by Yellow Tune and could not provide the KYC of wallets owned by recipients.

The agency said that Flipvolt actively assisted Yellow Tune in laundering proceeds of crime worth Rs 370 crore using the crypto route. Consequently, equivalent movable assets worth up to Rs 367.67 crore belonging to Flipvolt have been frozen under PMLA, until the exchange provides a full fund trail.

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