The Mumbai Zonal Office of Enforcement Directorate (ED) conducted search operations on July 22, under the Prevention of Money Laundering Act (PMLA), 2002 at various locations in Mumbai, Kolkata, New Delhi and Gurgaon. The search operations were conducted as part of an ongoing investigation in the case of illegal online Forex Trading through international brokers namely OctaFx Trading App and website www.octafx.com.
During search operations, movable properties in the form of bank funds, demat account holdings to the tune of approximately ₹80.43 crore have been frozen and various incriminating documents, digital devices have been recovered and seized, the ED officials said in a press statement issued late in the evening of July 24.
The ED initiated investigation based on an FIR registered by Pune’s Shivaji Nagar Police Station against several persons for their involvement in showing false temptations of high returns and duping people under the guise of Forex trading through OctaFx trading platform.
“The investigation revealed that the OctaFx online trading app and website are operating in India in association with India-based entity named, M/s OctaFx India Private Limited. OctaFx app and its website have not been authorised by the Reserve Bank of India (RBI) to deal in Forex trading. The firm M/s OctaFx India Pvt Ltd, OctaFx, and their entities have cheated investors in the guise of forex trading thereby earning a profit of more than ₹1,000 crore from Indian region,” an ED official said in a press statement.
Portion of these funds were layered through web of complex transactions with the help of shell entities and remitted abroad to its related entities in the garb of bogus freight services, import of services, etc.
All these activities are being managed and operated by owner of OctaFx group entities based in Russia, Spain, Georgia and Dubai. Based on investigation conducted and proceeds of crime ( PoC) identified so far, assets to the tune of approximately ₹38 crore in form of crypto currencies, bank balances and gold coins were attached by ED. Till date, the investigation agency has attached or frozen a total of approximately ₹118 crore worth assets in this case, sources from the ED said.
The search operations unveiled evidence which revealed that a portion of the funds deceitfully obtained from investors under the guise of forex trading on OctaFx has been funneled into Securities and Exchange Board of India (SEBI) registered Alternative Investment Funds (AIFs) as investments to present them as legitimate funds.
“Furthermore, it was discovered that OctaFx utilised entities based in the British Virgin Islands (BVI) and Estonia used to transfer funds for its promotional activities to lure 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, the investigation agency also found that OctaFx has established several shell companies and utilised their bank accounts under the pretense of facilitating forex trading. These entities layered funds through fraudulent e-commerce websites created by them to circumvent restrictions imposed by payment gateways and to hide the nature of such incoming funds.
Additionally, the search operations uncovered that OctaFx has employed technical experts to help create a payment aggregator for bypassing beneficial owner regulations. This payment aggregator was instrumental in redirecting misappropriated funds, thereby enabling OctaFx to receive money from unsuspecting investors. Further investigation is under progress.
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