Wednesday, October 5, 2022

Vauld Challenges India’s Enforcement Directorate Freeze Order

Troubled crypto lender Vauld says it disagrees with a freeze order on its assets by India’s regulators following allegations of money laundering.

In a press statement released today, the lender said the Enforcement Directorate (ED) issued a freeze order despite its cooperation. This statement follows that of India’s Enforcement Directorate on Friday announcing the freezing of $46.4 million at Vauld.

According to the agency, Flipvolt – a subsidiary of Vauld in India aided the laundering of illicit funds via lax checks.

Consequently, Vauld will forfeit the laundered sum until it provides details in its defense against the charges of the ED.

According to Vauld’s statement, several other exchanges operating in India received a summons from the agency requesting certain information.

In compliance with the agency’s summons, Vauld said it cooperated fully with the regulator and provided the required documents.

Furthermore, Vauld said it follows strict KYC regulations in every country and will continue to cooperate with regulators. Unfortunately, the ED proceeded with the freeze order despite cooperation from Vauld.

Vauld has said it respectfully disagrees with the freeze order as the suspected client account has been deactivated.  Therefore, it will be consulting with its lawyers for the best line of action.

Recall that the crypto lender vauld halted user’s withdrawals on its platform earlier in July following its exposure to fallen Terra USD.

Also, it was granted a three-moratorium by a Singaporean High Court. This was to avail it time to explore restructuring options and protect it against aggrieved investors.

Currently, rival lender, Nexo is carrying out a due diligence process for a potential acquisition of Vauld. It remains to be seen whether the acquisition will happen following the recent developments.

India’s Enforcement Directorate fights money laundering

Interestingly, Vauld isn’t the only exchange caught in the agency’s web. The ED has also frozen about $8.1 million in assets belonging to the crypto exchange WazirX. A Mumbai property of one of its directors was also raided.

According to the ED, WazirX is aiding loan app companies suspected of predatory lending activities to launder funds via crypto. 

The agency is reportedly investigating over 10 crypto firms for their role in helping instant loan apps launder illicit funds.

Joyce Onose
A Blockchain enthusiast and growing writer in the space with an understanding of the importance in creating quality content for readers in the industry. Also, keen on using her skills in improving Blockchain journalism.

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