OctaFX ponzi scam: Kingpin held in Spain, ED seizes Rs 2,385 crore crypto assets

Mumbai, Oct 17 (IANS) In a major success, the ED's efforts have resulted in the arrest of a Spanish mastermind behind the unauthorised operation of forex trading platform OctaFX and the agency has issued orders attaching its movable properties in the form of cryptocurrencies worth approximately Rs 2,385 crore, an official said on Friday

Pavel Prozorov was arrested in Spain by the local law-enforcers in connection with the ED's investigation against OctaFX, the official said in a statement.

The Mumbai zonal office of the Enforcement Directorate seized the Rs 2,385 crore assets under the Prevention of Money Laundering Act, 2002, for defrauding investors by falsely promising high returns.

So far, the ED has attached assets worth over Rs 2,681 crore, including 19 immovable properties and a luxury yacht in Spain owned by Prozorov, the ED said.

According to the ED, OctaFX duped Indian investors of Rs 1,875 crore and earned profits of Rs 5,000 crore on their investments between 2019 and 2024.

The funds came under the money laundering scanner after they were illegally transferred overseas.

In June, the ED seized properties in Spain and conducted coordinated multi-city searches across seven locations, including Mumbai, Delhi and Chennai, in connection with an illegal forex trading case registered in Pune.

The ED seized incriminating documents and digital devices during searches as part of an ongoing probe in the case of illegal online forex trading through the international broker -- OctaFx Trading App and website www.octafx.com.

The searches were conducted at seven locations, including Mumbai, Delhi, Chennai and Gurgaon, the federal agency said in a statement.

The ED initiated its investigation on the basis of an FIR registered by Shivaji Nagar Police Station in Pune against individuals accused of duping investors with false promises of high returns via the OctaFX forex trading platform.

The federal agency's investigation revealed that OctaFX, in partnership with OctaFx India Pvt Ltd, operated in India without RBI authorisation.

Searches revealed that OctaFX routed investor funds through mule accounts into escrow accounts of unauthorised payment aggregator Dinero Payment Services, it said.

The ED said shell firms posing as e-commerce platforms were onboarded using fake KYCs to access payment gateways and avoid detection.

Funds of investors were disguised as online purchases, layered through multiple accounts, and ultimately disbursed as fake forex or betting payouts to obscure their origin, it said.

--IANS

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