Jai Siya Ram

The OctaFX scam is a significant financial fraud case in India, where the unauthorized forex trading platform allegedly generated ₹800 Crore in proceeds of crime in just nine months by defrauding investors.

The investigation is being conducted by the Enforcement Directorate (ED) of India, which has filed chargesheets and attached/frozen assets worth hundreds of crores, including properties abroad.

Full Details of the OctaFX Scam

1. The Platform and the Mastermind

• Platform: OctaFX and its associated entities, including OctaFx India Pvt Ltd, operated the OctaFX trading app and website.
• Unauthorised Operation: OctaFX was an unauthorized forex broker in India, operating without the necessary permissions from the Reserve Bank of India (RBI).
• Mastermind: The alleged mastermind is a Russian national, Pavel Prozorov, who controlled the OctaFX group entities from bases in Russia, Spain, Georgia, and Dubai.

2. Modus Operandi (How the Scam Worked)

The company used a sophisticated multi-layered scheme to collect money from Indian investors, launder it, and transfer it abroad:

• Luring Investors: The platform aggressively promoted itself, including through sponsoring an IPL team and hiring celebrities and social media influencers to lure investors with promises of high returns from forex trading.
• Fund Collection: Investor funds were collected primarily through UPI/local bank transfers and routed through a complex network of accounts.
  • Mule Accounts & Shell Companies: OctaFX used mule accounts linked to shell companies (bogus firms) with dummy directors and manipulated Know Your Customer (KYC) documents.
  • Fake E-Commerce Façade: These shell companies posed as legitimate e-commerce platforms to gain access to payment gateways. Investor funds were disguised as online purchases, refunds, or vendor payments to conceal their true origin from authorities and banks.
  • URL Masking: The platform used URL masking techniques and frequently changed its login URLs to disguise the identity of payment gateways and evade regulatory detection.
• Trade Manipulation: The platform is also accused of manipulating trade activities to ensure substantial net losses for investors while diverting the defrauded funds into e-wallets and bank accounts of fictitious entities.
• Money Laundering & Transfer Abroad: The illicit funds were layered through a web of complex transactions and funneled out of India, often in the guise of fake “import of services” (like bogus freight services) to entities controlled by Prozorov in countries such as Spain, Estonia, Singapore, and the UAE.

3. Investigation and Enforcement Action

• Investigating Agency: The Enforcement Directorate (ED), Mumbai Zonal Unit, is leading the probe under the Prevention of Money Laundering Act (PMLA), 2002.
• Origin of Case: The investigation began based on an FIR filed by the Shivaji Nagar Police Station in Pune in December 2021, following complaints of investors being duped.
• Key Findings and Action:
  • Proceeds of Crime (PoC): Identified as approximately ₹800 crore generated from Indian operations in just nine months. Some ED reports suggest the total cheated amount may be over ₹1,000 crore.
  • Assets Attached: The ED has attached and frozen substantial assets, with the total value exceeding ₹296 crore in various provisional attachment orders.
    • Attached assets include bank deposits, demat holdings, cryptocurrency (USDT), and a luxury yacht named “Cherry” in the Western Mediterranean.
    • Significantly, the ED has attached properties in Spain, including 19 immovable properties and two residential properties belonging to Pavel Prozorov.
  • Chargesheets: The ED has filed multiple Prosecution Complaints (chargesheets) against OctaFX, its operating company OctaMarkets, founder Pavel Prozorov, and others