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ED issues Interpol notice in ₹5,000-crore forex fraud involving Russian man
OctaFX and Prozorov are accused of duping Indian investors of approximately ₹1,875 crore between July 2022 and April 2023, generating profits of around ₹800 cr
NEW DELHI: The Enforcement Directorate (ED) has issued an Interpol silver notice and is coordinating with the Federal Bureau of Investigation (FBI) and Europol to locate the assets and criminal network of Pavel Prozorov, a Russian national accused of running unauthorised forex trading platform OctaFX that duped Indian investors of an estimated ₹5,000 crore, people familiar with the development said on Sunday.
Prozorov was arrested by the Spanish law enforcement agency, Guardia Civil, in October this year.
OctaFX and Prozorov are accused of duping Indian investors of approximately ₹1,875 crore between July 2022 and April 2023, generating profits of around ₹800 crore.
According to the ED probe, considering the company’s operations from 2019 to 2024, total profits from India are estimated to exceed ₹5,000 crore, most of which has been illicitly transferred overseas. The platform operated in other countries as well and is banned in the Philippines, Pakistan, and Nigeria, among other countries.
The Interpol silver notice allows the member countries to share information with the requesting country — in this case India — about the criminal assets in foreign jurisdictions. Officials requesting anonymity said Estonia has already shared details of three companies and residential addresses related to the case while authorities in Madrid (Spain) have provided information about Prozorov’s 11 properties and four cars.
In September, the federal financial crimes probe agency had attached assets worth ₹2,681 crore in the case — including cryptocurrencies worth ₹2,385 crore in Spain, 19 immovable properties and a luxury yacht owned by Prozorov in Spain — with the help of FBI and local authorities. Besides, ED has filed two charge sheets against OctaFX and 54 other accused persons/entities, officials said.
“The Interpol silver notice is to identify the entire network and all assets bought through illegal proceeds of crime made in India and transferred overseas,” one of the officials said.
ED’s probe has revealed that funds collected by OctaFX from Indians were transferred abroad under the guise of fake imports of software and R&D services to entities controlled by Prozorov in Spain, Estonia, Russia, Hong Kong, Singapore, the UAE, and the UK.
“A portion of the laundered funds were later reintroduced into India as FDI. Misappropriated funds were used for luxury consumption, property acquisitions, purchase of luxury yachts, and global expansion of OctaFX. Portions of these funds were parked in cryptocurrency wallets controlled by Pavel Prozorov,” ED had said in a statement in October this year.
To get the money back, especially cryptocurrencies, “we are in touch with Spanish authorities, FBI, Europol and other international agencies,” a second official said, also declining to be named.
FBI is learnt to have already shared crucial information with ED.
OctaFX, according to ED’s statement and court documents, presented itself as an online forex trading platform for currency, commodities, and crypto trading without the Reserve Bank of India’s (RBI) permission. The initial investors received small profits to build trust, as is generally seen in a typical ponzi scheme, the agency said.
“Probe has also revealed that OctaFX operated through a distributed global network designed to evade regulatory scrutiny and layer illicit funds across jurisdictions. Marketing activities were handled by entities in the British Virgin Islands (BVI); entities/persons in Spain hosted servers and back-office operations; entities in Estonia managed payment gateways; entities in Georgia provided technical support; entity in Cyprus served as the holding company for the Indian entity; entities/persons in Dubai oversaw Indian operations via Russian promoters; and entities in Singapore facilitated the export of bogus services to launder funds abroad,” ED said in October.
OctaFX manipulated trading operations, using falsified candlestick charts and deliberate slippage, ensuring consistent investor losses. It floated an Introducing Brokers (IB) scheme to lure more investors wherein individuals and entities referring clients were offered hefty commissions based on client trading activity, ED said, adding the platform also employed Indians in Russia and Spain to provide localised support for Indian clients.
The money was collected from investors via UPI and local bank transfers, which were routed through dummy Indian entities and individuals’ accounts, layered across multiple mule accounts, ED said.
An Octafx spokesperson denied the allegations. “We strongly refute any allegations of money laundering, promises of quick riches and high returns, and trading manipulations,” the spokesperson said.
“As a global broker, Octa is neither involved in nor has any information about Pavel Prozorov's affairs. Any suggestion to the contrary would be purely speculative,” the company statement said.
“The global broker Octa is operating in accordance with the laws and regulations of the jurisdictions in which it is registered and conducts business. Octa adheres to the high international industry standards and best market practices across all its activities, including the implementation of KYC and AML compliance programs. Octa's analytics are based on up-to-date market data provided by global and officially verified price sources. The global broker Octa is not involved in any legal proceedings in India.”.
