Enforcement Directorate raids Bengaluru firm in connection with crypto scam
India Today
The Enforcement Directorate conducted raids on multiple premises of Yellow Tune Technologies Private Limited in Bengaluru.
The Enforcement Directorate (ED) conducted searches on and raided multiple premises of Yellow Tune Technologies Private Limited in Bengaluru. The law enforcement agency and economic intelligence agency also issued a freezing order to freeze the bank accounts, payment gateway balances and crypto balances of Flipvolt Crypto-currency exchange to the tune of Rs 370 crore worth of assets.
Sources confirmed that several financial technology applications terminated their services and diverted their huge profit earnings by misusing laws and following similar modus operandi. While carrying out a fund trail investigation, the ED found that a large number of funds to the tune of Rs 370 crore, which were deposited by 23 entities including the accused NBFCs and their fintech companies into the INR wallets of Yellow Tune Technologies Private Limited held with crypto exchange Flipvolt Technologies Private Limited.
These amounts were the proceeds of crime derived from predatory lending practices. It was further revealed that the cryptocurrency so purchased was further transferred to various unknown foreign wallet addresses.
Further, searches were conducted at various premises of Yellow Tune Technologies between August 8, 2022, and August 10 in order to locate the beneficial owners of this company and of the recipient wallets. However, the company's promoters remain untraceable.
The ED-led probe also revealed that this shell entity was allegedly incorporated by Chinese nationals Alex and Kaidi (real names unidentified) with the active connivance of willing chartered accountants and company secretaries and the bank accounts were issued in the name of dummy directors. These Chinese Nationals allegedly left India in December 2020 and later the bank's internet credentials, Digital Signatures of dummy Directors etc., were shipped abroad and used by the said Chinese nationals to launder the proceeds of crime.
The ED could trace the assets of the Yellow Tune entity to the extent of Rs 2.31 Crore and has issued the freezing order under the Prevention of Money Laundering Act, 2002.
Yellow Tune, by using the assistance of Flipvolt Crypto-Exchange, which is known for lax KYC norms, no EDD mechanism, no check on the source of funds of the depositor, no mechanism of raising STRs, etc assisted the accused fintech companies in avoiding regular banking channels and managed to procure the fraud amount in the form of crypto assets.
