The Enforcement Directorate (ED) on Friday stated it has actually connected Rs 370 crore worth deposits — bought bank, payment entrance and crypto accounts — of a Bengaluru-based “shell” business integrated by 2 Chinese nationals who left the nation in 2020.
The federal firm froze the funds after it robbed the facilities of the business, Yellow Tune Technologies Pvt. Ltd, situated in Karnataka’s capital city over 3 days, beginning August 8.
The firm came across the supposed unlawful activities of the business throughout its continuous cash washing probe versus some suspicious smartphone-based loan financing apps which are mentioned to be “backed by” Chinese funds.
These apps, according to the ED, quickly shut store and “diverted” their earnings.
“While doing fund trail investigation, ED found that deposits to the tune of Rs 370 crore were deposited by 23 entities, including accused NBFCs (non-banking financial companies) and their fintech companies into the wallets of Yellow Tune Technologies Private Limited held with crypto exchange Flipvolt Technologies Private Limited.”
“These amounts were nothing but proceeds of crime derived from predatory lending practices,” the firm stated in a declaration.
It stated crypto currency, so acquired, was moved to numerous unidentified foreign wallet addresses.
The firm stated it robbed the business (Yellow Tune) to find its “beneficial owners” which of the recipient wallets.
“But the company’s promoters are untraceable. It is found that this shell entity was incorporated by Chinese nationals Alex and Kaidi (real names not known) with the active connivance of willing CAs (chartered accountants) and CSs (company secretaries) and the bank accounts were opened in the name of dummy directors,” it stated.
These Chinese nationals left India throughout December 2020, and later on the bank web qualifications, digital signatures of dummy directors were delivered abroad and utilized by the stated Chinese nationals to “launder the proceeds of crime.”
It stated Yellow Tune, with support from Flipvolt crypto exchange, which has “very lax KYC norms, no EDD (extended due diligence) mechanism, no check on the source of funds of the depositor, and no mechanism of raising STRs (suspicious transaction reports) assisted the accused fintech companies in avoiding regular banking channels, and managed to easily take out all the fraud money in the form of crypto assets.”
The firm stated regardless of offering duplicated chances, Flipvolt crypto exchange “failed” to offer the total path of crypto deals made by Yellow Tune Technologies Private Limited.
It declared that the crypto exchange “could not supply any form of KYC of the opposite party wallets.”
“The lax KYC norms, loose regulatory control of allowing transfers to foreign wallets without asking any reason/declaration/KYC, non-recording of transactions on blockchains to save costs etc, has ensured that Flipvolt is not able to give any account for the missing crypto assets.”
“It has made no sincere efforts to trace these crypto assets. By encouraging obscurity and having lax AML (anti-money laundering) norms, it has actively assisted Yellow Tune in laundering the proceeds of crime worth Rs 370 crore using the crypto route,” the ED stated.
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