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India's Enforcement Directorate freezes $46 million of Vauld's finances on suspicion of money laundering
Singapore-based Crypto Lender Vauld is facing money laundering accusations in India after its local business, Flipvolt Technology, was frozen for $46.5 million (3.70 billion Indian rupees).
In an Aug. 12 statement, India's Enforcement Directorate (ED) announced that it is investigating Vauld (Flipvolt Technologies) and Yellow Tune Technologies for allegedly facilitating illicit payments through the crypto exchange.
According to the regulator, 23 businesses under investigation by the ED placed 3.70 billion rupees into Yellow Tune's crypto wallet, which was then transferred to overseas wallet addresses without following legal protocol and submitting suspicious transaction reports (STRs).
According to the statement:
Yellow tune, with the help of Flipvolt Crypto-Exchange, which has very lax KYC norms, no EDD mechanism, no check on the source of funds of the depositor, no mechanism for raising STRs, and so on, assisted the accused fintech companies in avoiding regular banking channels and easily taking out all the fraud money in the form of crypto assets.
The Indian Authority accused the exchange of being careless with the matter. It failed to give the authorities with KYC credentials for the wallets and was unable to account for Yellow Tune's bitcoin transactions.
It has not made any genuine efforts to track down these digital assets. It deliberately supported M/s Yellow Tune in laundering the proceeds of crime of Rs 370 Crore via the crypto channel by promoting obscurity and having loose AML requirements.
As a result, Vauld's Indian exchange will forfeit the laundered funds unless it produces complete facts in defense of the claims against it.
Indians are speaking out against money laundering.
The Enforcement Directorate (ED) of India has previously begun an inquiry into the actions and compliance of non-banking financial firms (NBCFs) with RBI rules.
According to the investigative report, several failing fintech businesses used cryptocurrency to launder their gains. The crypto exchanges involved in the investigation reportedly neglected to do due diligence before assisting the organizations in transferring assets to overseas wallets.
According to India's Economic Times, the ED is investigating roughly ten cryptocurrency exchanges for aiding the laundering of more than 10 billion rupees ($130 million).
As a result, on August 5, the ED stormed Wazirx's region, freezing around $8 million belonging to the exchange. WazirX is claimed to have assisted in converting Indian rupees to cryptocurrency and then transferring the cash to international wallets via Binance.