The Enforcement Directorate (ED) has conducted searches at various premises of Bengaluru-based Yellow Tune Technologies Private Limited and issued an order freezing its bank balances, payment gateway balances and Crypto balances of Flipvolt Crypto-currency exchange to the tune of Rs 370 crore.
After the criminal investigation, many of these fintech Apps have shut shop and diverted the huge profits earned using the modus operandi of investments on various crypto and gateway balances, the ED said.
While doing fund trail investigation, the ED found that a large amount of funds to the tune of Rs 370 crore were deposited by 23 entities including accused NBFCs and their fintech companies into the Rupee 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. “Crypto currency so purchased was transferred to various unknown foreign wallet addresses. Further, searches were conducted at various premises of Yellow Tune Technologies Private Limited on August 8 to 10 in order to locate the beneficial owners of this company and that of the recipient wallets,” it said.
However, the company's promoters are untraceable. It is found that this shell entity was incorporated by Chinese nationals Alex and Kaidi (real name not known) with the active connivance of willing chartered accountants (CAs)/company secretaries (CSs) and the bank accounts were opened in the name of dummy directors.
These Chinese nationals left India during December 2020 and later the Bank internet credentials, digital signatures of dummy directors were shipped abroad and were used by the said Chinese nationals to launder the proceeds of crime. The ED could trace the assets of Yellowtune to the extent of Rs 2.31 crore and has issued the freezing order under PMLA.