<p>The Directorate of Enforcement (ED) has conducted searches at various offices of M/s Yellow Tune Technologies Private Limited in Bengaluru and has issued an order to freeze its bank balances, payment gateway balances and crypto balances of Flipvolt Crypto-currency exchange worth Rs 370 crore.</p>.<p>While doing a fund trail investigation, ED official found that a large number of funds to the tune of Rs 370 crore were deposited by 23 entities, including several Non-Banking Financial Company (NBFCs) and their fintech companies into the INR wallets held by M/s Yellow Tune Technologies Private Limited with Crypto Exchange of M/s Flipvolt Technologies Private Limited. These amounts were nothing but proceeds of crime derived from predatory lending practices. Cryptocurrency so purchased was transferred to various unknown foreign wallet addresses, ED said in a release.</p>.<p><strong>Also Read | <a href="https://www.deccanherald.com/opinion/police-tactics-are-chilling-india-s-crypto-winter-1135250.html">Police tactics are chilling India’s crypto winter</a></strong></p>.<p>Searches were conducted at various premises of M/s Yellow Tune Technologies Pvt Ltd from August 8 to 10 to locate the beneficial owners of this company and of the recipient wallets. But the company’s promoters are untraceable. </p>.<p>According to the ED release, it was found that this shell entity was incorporated by Chinese nationals Alex and Kaidi (not their real name) in active connivance with willing CAs/CSs and bank accounts were opened in the name of dummy directors. These Chinese nationals left India in December 2020 and later their bank internet credentials, digital signatures of dummy directors etc were shipped abroad and were used by the said Chinese to launder the proceeds of crime.</p>.<p>ED said, in a release, that it could trace Yellow Tune’s assets worth Rs 2.31 crore and has issued an order to freeze them under the Prevention of Money Laundering Act.</p>.<p>Yellow Tune -- with the assistance 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 of raising STRs, etc -- is said to have assisted fintech companies to avoid regular banking channels and managed to easily take out all the fraud money in the form of crypto assets.</p>.<p>Despite repeated opportunities, Flipvolt Crypto-exchange failed to give the complete trail of crypto transactions made by M/s Yellow Tune Technologies Pvt Ltd. Therefore, equivalent movable assets to the extent of Rs 367.67 crore lying with Flipvolt Crypto-exchange in the form of Bank and Payment Gateway Balances worth Rs 164.4 crore and Crypto assets lying in their pool accounts worth Rs 203.26 crore, are frozen under PMLA 2002, till complete fund trail is provided by the crypto-exchange. Further investigation is on, ED said.</p>
<p>The Directorate of Enforcement (ED) has conducted searches at various offices of M/s Yellow Tune Technologies Private Limited in Bengaluru and has issued an order to freeze its bank balances, payment gateway balances and crypto balances of Flipvolt Crypto-currency exchange worth Rs 370 crore.</p>.<p>While doing a fund trail investigation, ED official found that a large number of funds to the tune of Rs 370 crore were deposited by 23 entities, including several Non-Banking Financial Company (NBFCs) and their fintech companies into the INR wallets held by M/s Yellow Tune Technologies Private Limited with Crypto Exchange of M/s Flipvolt Technologies Private Limited. These amounts were nothing but proceeds of crime derived from predatory lending practices. Cryptocurrency so purchased was transferred to various unknown foreign wallet addresses, ED said in a release.</p>.<p><strong>Also Read | <a href="https://www.deccanherald.com/opinion/police-tactics-are-chilling-india-s-crypto-winter-1135250.html">Police tactics are chilling India’s crypto winter</a></strong></p>.<p>Searches were conducted at various premises of M/s Yellow Tune Technologies Pvt Ltd from August 8 to 10 to locate the beneficial owners of this company and of the recipient wallets. But the company’s promoters are untraceable. </p>.<p>According to the ED release, it was found that this shell entity was incorporated by Chinese nationals Alex and Kaidi (not their real name) in active connivance with willing CAs/CSs and bank accounts were opened in the name of dummy directors. These Chinese nationals left India in December 2020 and later their bank internet credentials, digital signatures of dummy directors etc were shipped abroad and were used by the said Chinese to launder the proceeds of crime.</p>.<p>ED said, in a release, that it could trace Yellow Tune’s assets worth Rs 2.31 crore and has issued an order to freeze them under the Prevention of Money Laundering Act.</p>.<p>Yellow Tune -- with the assistance 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 of raising STRs, etc -- is said to have assisted fintech companies to avoid regular banking channels and managed to easily take out all the fraud money in the form of crypto assets.</p>.<p>Despite repeated opportunities, Flipvolt Crypto-exchange failed to give the complete trail of crypto transactions made by M/s Yellow Tune Technologies Pvt Ltd. Therefore, equivalent movable assets to the extent of Rs 367.67 crore lying with Flipvolt Crypto-exchange in the form of Bank and Payment Gateway Balances worth Rs 164.4 crore and Crypto assets lying in their pool accounts worth Rs 203.26 crore, are frozen under PMLA 2002, till complete fund trail is provided by the crypto-exchange. Further investigation is on, ED said.</p>
