An illegal online trading platform, OctaFX, is under investigation by the Enforcement Directorate (ED) for allegedly laundering thousands of crores of rupees from India to tax havens over the past few years. The platform is being scrutinized for its transcontinental operations that involve converting proceeds of crime into cryptocurrencies and utilizing international payment gateways.
A multi-agency probe has revealed that OctaFX, incorporated in Cyprus and dealing in forex, commodities, and cryptocurrencies, allegedly generated ₹800 crore from its India operations in just nine months. These transactions were reportedly layered through "fake import of services" from Singapore to launder funds acquired in India.
The ED's investigation revealed that OctaFX manipulated trades, leading to significant losses for investors, while diverting funds into e-wallets and accounts of fictitious entities. The agency has provisionally attached assets worth ₹131.45 crore in Spain belonging to Pavel Prozorov, the alleged mastermind behind the illegal trading platform. These assets include a luxury yacht, a villa, and other properties. Furthermore, the ED has seized ₹160.8 crore in assets, including properties in Spain, and has also recovered incriminating documents and digital devices.
The ED's case is based on a First Information Report (FIR) registered by the Shivaji Nagar police station in Pune, against several individuals for allegedly defrauding investors by promising high returns through the OctaFX forex trading platform. The investigation found that OctaFX operated in India without authorization from the Reserve Bank of India (RBI), in collaboration with MS OctaFX India Private Limited. The platform allegedly collected investor money through mule accounts in the names of fake e-commerce firms and routed funds through unauthorized payment aggregators and escrow accounts, using advanced masking techniques to avoid regulatory detection. OctaFX also reportedly changed its login URLs and web addresses to obscure its fraudulent operations from investors.
The ED estimates that Indians have lost over ₹22,800 crore in approximately 36.4 lakh financial fraud cases reported in 2024. This represents a significant increase from ₹7,465 crore in losses in 2023, with a rise in the number of cases from 24.4 lakh in the same year.
The RBI has been cautioning the public against unauthorized forex trading platforms. In 2022, the RBI noted misleading advertisements of unauthorized Electronic Trading Platforms (ETPs) offering forex trading facilities to Indian residents. These platforms often engage agents who personally contact individuals, enticing them with promises of exorbitant returns. The RBI has also been issuing an alert list of unauthorized forex trading platforms, with the list being updated periodically.
Besides OctaFX, other illegal online platforms are also under investigation for investment fraud, including Power Bank, Angel One, TM Traders, Vivan Li, and Zara FX.
