While Bitcoin [BTC] and other cryptocurrencies try to thrive through the bear market, projects in the industry are falling apart. It appears that regulators are now more stringent than ever. The Indian Government in particular still hasn’t warmed to the crypto sector yet. Prominent crypto platform, Vauld seems to be swimming in troubled waters as the Enforcement Directorate [ED] of India now has eyes on it.
The ED continued to freeze the company’s assets which were worth $46.5 million on Thursday.
According to the ED, the crypto exchange was used to deposit 3.7 billion Indian rupees by 23 entities, including non-banking financial companies and fintech firms, into the wallets controlled by Yellow Tune Technologies.
The agency also added that Vauld maintains very lax KYC norms, no EDD mechanism, no check on the source of funds of the depositors, no mechanism of raising STRs, among others. These factors have led the accused firm into avoiding regular banking channels and to easily take out all the fraud money in the form of crypto assets.
This development couldn’t have come at a worse time. It should be noted that in July, Vauld decided to stop all trading, deposits, and withdrawals from its platform. While attempting to emerge from bankruptcy, the company recently applied for protection from creditors. Later, it was revealed that the company owes its creditors $400 million.
With the ED freezing its assets, Vauld has landed in more trouble.
The love-hate relationship that Indian authorities entail with the crypto industry has been a difficult sight for crypto enthusiasts in India. Just last week, the ED froze $8 million worth of WazirX assets. Notably, WazirX was among the first cryptocurrency platforms and is presently the biggest exchange in the nation. In 2021, its volume even hit $43 billion.
It’s likely that the ED would take control over several other Indian Non-Banking Financial Company firms. Money laundering seems to be a significant concern to them at the moment.
The market has been negatively impacted by the 30% tax on cryptocurrencies in the midst of all of this.
Crypto experts claim that if this attitude is maintained, the Indian crypto ecosystem will almost certainly collapse.