The Enforcement Directorate has raided various premises of the Yellow Tune Technologies Private Limited in Bengaluru concerning illegal loan apps and money laundering through cryptocurrencies.
ANI reported that the agency froze Rs 370 crore in company assets held with the crypto exchange Flipvolt Technologies Private Limited.
The report further said that large amounts of money earned through illegal lending were deposited by 23 entities, including NBFCs and fintech companies, into the INR wallets of Yellow Tune Technologies.
According to the ED, the company sent the purchased cryptocurrency to various unknown foreign wallets. "Cryptocurrency so purchased was transferred to various unknown foreign wallet addresses. Searches were conducted at various premises of Yellow Tune Technologies from August 8-10 to locate the beneficial owners of this company and that of the recipient wallets," the ED said.
The company owners remain untraceable. This shell organisation was formed by Chinese nationals Alex and Kaidi (actual names unknown) with the cooperation of chartered accountants and company secretaries. Bank accounts were opened in the names of dummy directors.
These Chinese nationals left India in December 2020. The agency said that the bank's internet credentials and digital signatures of fake directors were shipped abroad and utilised to launder the proceeds of crime by the Chinese individuals.
The ED could trace Rs 2.31 crore worth of assets of the Yellow Tune and has issued the freezing order under the Prevention of Money Laundering Act, 2002.
Using the assistance of Flipvolt, known for lax KYC norms and checks on funding sources of depositors, Yellow Tune helped the accused fintech companies avoid regular banking channels and managed to procure the fraud amount in the form of crypto assets, said ED.
Furthermore, Flipvolt failed to share the ledger of crypto transactions made by Yellow Tune and could not provide KYC of the wallets owned by the recipients.
The agency said Flipvolt has actively assisted Yellow Tune in laundering the proceeds of crime worth Rs 370 crore using the crypto route. Therefore, equivalent movable assets worth up to Rs 367.67 crore lying with Flipvolt were frozen under PMLA, till the exchange provides a complete fund trail.