Vauld Refutes Charges Of Flouting KYC Norms, Says Extended Cooperation To ED

A day after the Enforcement Directorate (ED) froze assets lying with the Indian entity of Vauld, the crypto platform on Saturday (August 13) said it had cooperated with the agency and that it is seeking legal advice to protect the interests of the company.

“We follow strict KYC (know your customer) requirements in every country, including India. We are seeking legal advice on our best course of action in order to protect the interests of the company, its customers, and all the stakeholders,” Vauld said in a statement.

It also added that the freeze order issued by the ED pertains to one customer that availed its services for a brief period of time. Vauld also said that the account in question was subsequently deactivated by the company.

It refuted allegations of flouting KYC norms and disagreed with the freezing order issued by the agency.

“It is unfortunate that, despite extending our cooperation, the Enforcement Directorate has proceeded to pass a freezing order, pursuant to which crypto assets in the pool wallets of the company have ordered to been frozen to the extent of approximately INR 2040 Mn,” Vauld said.

On Friday, the ED froze assets worth INR 370 Cr belonging to a Bengaluru-based shell company lying with the Indian entity of Vauld, Flipvolt Technologies. The agency also said that it raided multiple premises of the shell company and found that the firm was operated by Chinese nationals with dubious directors.

Refuting allegations of non-cooperation, Vauld stated that it had provided ‘all required’ information and documents in response to summons issued by the ED in July. 

“We have fully cooperated with the Enforcement Directorate and will continue to extend our cooperation to ensure we continue to remain a safe place for customers to transact and own cryptocurrencies,” the Singapore-headquartered company said.

The ED’s probe into the case found that 23 NBFCs and fintech firms allegedly diverted funds to the tune of INR 370 Cr into the wallets of Yellow Tune. Afterwards, the proceeds were used to purchase cryptocurrencies which were then transferred to various unknown foreign wallet addresses. 

The ED also accused Flipvolt of not supplying KYC documentation for opposite party wallets and for failure to record crypto transactions. 

The development adds to the woes of Vauld, which last month announced suspension of operations over high exposure to the Terra Luna crash and rising customer withdrawals. Recently, a Singapore court granted the company a three-month protection from creditors till November.