OctaFX Case: ED Raids Four Cities, Freezes Assets Worth INR 80 Cr

The Enforcement Directorate (ED) has reportedly conducted searches at several locations connected to the online forex trading app OctaFx, which is under investigation for allegedly defrauding investors of several crores.

According to an India Today report, the ED’s Mumbai Zone carried out searches in Mumbai, Kolkata, Delhi and Gurugram under the Prevention of Money Laundering Act (PMLA).

The ED began its investigation into the platform following an FIR filed in Pune, which accused several individuals of defrauding investors by promising high returns through the OctaFx trading platform.

The OctaFx app and website are not authorised by the RBI for forex trading. The investigation uncovered that the company’s Indian operations and associated entities defrauded investors by falsely representing forex trading, amassing over INR 1,000 Cr from India.

A portion of these funds was laundered through intricate transactions involving shell companies and was remitted abroad to affiliated entities under false pretenses such as bogus freight services and import of services, sources told India Today.

The illegally acquired funds were also channeled into SEBI-registered Alternative Investment Funds (AIFs) to legitimise them. Furthermore, it was discovered that OctaFx used entities based in the British Virgin Islands and Estonia to transfer funds for its promotional activities to attract investors.

The report added that investigations also found that these operations were overseen by the owner of the OctaFx group, who is based in Russia, Spain, Georgia, and Dubai.

The ED has so far attached assets worth approximately INR 38 Cr in the form of cryptocurrencies, bank balances, and gold coins in connection with the case.

According to the report, during the search operations, movable assets, including bank funds and Demat account holdings worth approximately INR 80.43 Cr, were frozen. Incriminating documents and digital devices were also recovered and seized. To date, the total amount attached or frozen in this case stands at around INR 118 Cr, with further investigation continuing.

In September 2022, the ED froze assets worth INR 21.14 Cr belonging to the online forex trading app OctaFX for FEMA violation.

This comes at a time when the ED seized crypto assets worth INR 90 Cr from Binance, ZebPay, and WazirX in connection with a money laundering case involving online gaming app E-Nugget. The app was accused of luring users with promises of high returns.

In total, law enforcement actions have led to the seizure, attachment, or freezing of assets amounting to INR 163 Cr, including cash, cryptocurrencies, bank balances, and office space.

This development also comes days after WazirX experienced a major security breach. Following this, the cryptocurrency exchange has announced a prize of $23 Mn as a part of its bounty programme to recover the $230 Mn assets stolen during the attack.

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