The Mumbai zonal office of the directorate of enforcement (ED) has attached cryptocurrency assets worth around Rs2,385 crore under the Prevention of Money Laundering Act (PMLA), 2002, as part of its ongoing investigation into the unauthorised forex trading platform OctaFX. The agency also confirmed that the alleged mastermind, Pavel Prozorov, has been arrested in Spain by the local police for his involvement in cybercrimes affecting multiple countries.
According to ED, the probe was initiated based on a first information report (FIR) registered by Shivaji Nagar police station in Pune, Maharashtra, against several individuals for defrauding investors by promising unusually high returns through the OctaFX trading platform.
Investigations revealed that OctaFX systematically cheated Indian investors of about Rs1,875 crore between July 2022 and April 2023, generating profits of around Rs800 crore during this period. Considering its operations from 2019 to 2024, the total profits from Indian investors are estimated to exceed Rs5,000 crore, most of which were allegedly transferred overseas through a complex web of laundering channels.
OctaFX presented itself as an online forex trading platform dealing in currencies, commodities and cryptocurrencies without obtaining the required authorisation from Reserve Bank of India (RBI). The company followed a pattern similar to a Ponzi scheme, initially providing small profits to early investors to build credibility before siphoning off larger sums later.
ED uncovered an extensive global network used to disguise the illicit operations and move money across multiple jurisdictions. Marketing activities were managed by entities based in the British Virgin Islands, while servers and back-office operations were hosted in Spain. Entities in Estonia handled payment gateways, those in Georgia provided technical support, and a Cyprus-based company acted as the holding entity for OctaFX’s Indian operations. Russian and Dubai-based promoters oversaw Indian operations, and entities in Singapore facilitated bogus export transactions to justify the outward movement of funds.
Investigators found that OctaFX manipulated trading operations using falsified candlestick charts and intentional slippage, ensuring consistent investor losses. The platform also launched an 'introducing brokers' (IB) scheme that offered hefty commissions to individuals and entities referring new clients, with Indians based in Russia and Spain providing localised support to Indian customers.
ED investigation revealed that investor funds were collected through UPI and local bank transfers and then routed via dummy Indian entities and mule accounts. These were layered through unauthorised payment aggregators that provided merchant IDs and integration kits to shell companies posing as e-commerce businesses. The funds were eventually moved abroad under the pretext of importing software or conducting research and development services. They were traced to entities controlled by Pavel Prozorov in Spain, Estonia, Russia, Hong Kong, Singapore, the UAE and the UK.
A portion of the laundered funds was later reintroduced into India as foreign direct investment (FDI), while some were used for luxury consumption, including property purchases, a luxury yacht in Spain, and other high-end acquisitions. ED says part of the money was also parked in cryptocurrency wallets controlled by Mr Prozorov.
So far, the agency has attached assets worth over Rs2,681 crore, including 19 immovable properties and a luxury yacht owned by Mr Prozorov. A prosecution complaint (PC) and one supplementary PC have already been filed against OctaFX and 54 accused individuals and entities before the special court (PMLA), which has taken cognisance of the case.
ED says further investigation is underway to trace more assets, identify other participants in the laundering network and assess the full extent of cross-border violations. The agency reiterated its commitment to acting against unauthorised forex trading platforms and cryptocurrency-based money laundering schemes targeting Indian investors.
