OctaFX case: ED freezes assets worth ₹80.43 crore after searches in four cities

ED freezes ₹80.43 crore assets in OctaFX money-laundering probe. Funds allegedly obtained deceitfully from investors via forex trading. Shell companies used for fraudulent activities.

Mumbai: The Enforcement Directorate (ED)’s Mumbai zonal unit has frozen movable assets worth ₹80.43 crore during searches as part of its money-laundering investigation against OctaFX, an online trading platform.

HT Image

The agency conducted searches on Monday at various locations in Mumbai, Kolkata, Delhi and Gurgaon under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. During the searches, the ED froze movable properties in the form of bank funds and demat account holdings worth ₹80.43 crore. It also seized multiple “incriminating” documents and digital devices, agency sources said.

The ED started its investigation based on a case registered by the Shivaji Nagar police station in Pune against several persons for their alleged involvement in entrapping and duping victims on the pretext of earning high returns via forex trading through the OctaFx trading app and website.

The entities allegedly earned a profit of more than ₹1,000 crore from the India region in the process, ED sources said. A portion of these funds were allegedly layered through a web of complex transactions with the help of shell companies. The funds were then remitted abroad to related entities in the name of bogus freight services and import of services, sources said.

The investigation revealed that the Saint Lucia-registered company was operating in the country via an India-based entity, OctaFx India Private Limited. The OctaFX app and website were not authorised by the Reserve Bank of India to deal in forex trading, agency sources said. All activities are allegedly being managed and operated by the owner of OctaFx group entities based in Russia, Spain, Georgia and the United Arab Emirates.

On the basis of the investigation conducted and the identification of the proceeds of crime ( PoC) in the case so far, the ED had earlier attached assets worth around ₹38 crore in the form of cryptocurrencies, bank balances and gold coins. In total, the agency has attached or frozen assets worth around ₹118 crore so far.

The search operations conducted on Monday brought to light evidence revealing that a portion of the funds were allegedly deceitfully obtained from investors in the guise of forex trading on OctaFx. The money was allegedly funnelled into Alternative Investment Funds (AIFs) registered with the Securities and Exchange Board of India (SEBI) as investments to present them as legitimate funds, sources said.

Further, it was discovered that OctaFx allegedly utilised entities based in the British Virgin Islands (BVI) and Estonia to transfer funds for its promotional activities to lure new investors. “This has been corroborated by celebrities and production houses who have participated in OctaFx’s promotional campaigns across different platforms,” an ED official said.

During the search operations, it was also revealed that OctaFx has allegedly established several shell companies and utilised their bank accounts to facilitate forex trading. These entities allegedly layered funds through fraudulent e-commerce websites to circumvent restrictions imposed by payment gateways and hide the nature of such incoming funds, sources said.

“It was also revealed that OctaFx has employed technical experts to help create a payment aggregator to bypass beneficial owner regulations. This payment aggregator was instrumental in redirecting misappropriated funds, thereby enabling OctaFx to receive money from unsuspecting investors,” the ED official said.