FinTech news in money laundering category

Flipvolt Technologies, the India registered entity of Singapore-headquartered Vauld, 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 Enforcement Directorate said Friday of its ongoing investigation. Vauld’s India entity failed to provide the agency with a complete trail of crypto transactions made by Yellow Tune and also could not supply KYC details of the wallets, ED said. The agency said it has frozen assets from Vauld’s India entity till it provides a complete fund trail. Vauld, which suspended its customers from withdrawing, trading and depositing on its eponymous platform last month, recently filed for bankruptcy and reportedly owes creditors $363 million, according to news outlet The Block, which cited legal documents it obtained.

Both Tornado Cash and Blender.io appeared to play a role in obfuscating the digital trail of funds stolen in that $625 million hack, though Tornado was not sanctioned at that time and the Axie-linked theft was not mentioned in today’s OFAC announcement. Back in May, the U.S. Treasury also sanctioned cryptocurrency mixer Blender.io, another service the Lazarus Group used to launder cryptocurrency stolen after hacking the Ronin bridge on the play-to-earn video game Axie Infinity in April. The Treasury also said Tornado was used by hackers to launder at least $7.8 million in stolen crypto funds during last week’s Nomad heist, which saw cybercriminals exploit a trivial bug to steal $100 million in crypto assets, including Ethereum (ETH), Binance Coin, Tether, USD Coin and Dai. The U.S. has sanctioned decentralized cryptocurrency mixing service Tornado Cash for its role in enabling billions of dollars’ worth of cryptocurrency to be laundered through its platform.

The U.S. Justice Department (DOJ) has seized over 94,000 bitcoins that were allegedly stolen in the 2016 hack of crypto exchange Bitfinex and arrested a married couple suspected to have laundered the money, the department announced today. While Morgan and Lichtenstein were not formally accused of perpetrating the hack.