Key Takeaways:
- The move comes after a month after Vauld froze withdrawals in July
- ED recently froze Rs 64.67 crore worth of bank deposits belonging to WazirX.
- The latest move is part of the ED’s ongoing money laundering investigation against at least ten crypto exchanges.
On August 11, the Enforcement Directorate (ED) froze bank assets worth Rs 370 crore belonging to Singapore-based cryptocurrency exchange Vauld. This comes days after ED froze Rs 64.67 crore worth of bank deposits of Binance-owned exchange WazirX. WazirX is facing a probe for outward remittance of crypto assets worth Rs 2,790 crore to unknown wallets.
The latest development is part of the ED’s ongoing money laundering investigation against at least ten crypto exchanges and their fintech partners for predatory lending practices violating the RBI guidelines.
The ED’s move against Vauld comes as a slap in the face of the Singaporean-based crypto exchange, which is already going through a hard time. In early July, Vauld froze all withdrawals, deposits, and trading provisions across its platform owing to “financial challenges.” The crypto lending platform went bankrupt after customers withdrew hundreds and millions of dollars in the aftermath of the Terra Luna crash.
According to Vauld CEO Darshan Bathija, the exchange had raked up liabilities worth $400 Mn against assets of just $330 Mn. One important point to note about Vauld is that out of the 8 Lakh Vauld users, about 75% were Indians, but they accounted for just 10% of its AUM, according to a former employee.
“We are investigating this matter; we kindly request your patience and support; we will keep you updated as soon as we have more information on this,” a Vauld spokesperson said in response to a media inquiry.
The Enforcement directorate is increasingly clamping down on crypto firms it suspects violating anti-money laundering laws. The money laundering investigation gained attention recently after the ED raided the properties of a WazirX director.
The ED estimates the accused firms laundered over 1,000 crore rupees/US$130 million in the instant loan app case, adding that most of the allegations have a China link. According to ED’s findings, the accused firms approached exchanges to buy crypto for over Rs 100 crore ( $13 million), after which the tokens were sent to international wallets without enhanced due diligence. ED also accuses the firms of failing to raise suspicious transaction reports.
