New Delhi: The Enforcement Directorate (ED) has provisionally attached crypto assets worth ₹2,385 crore linked to the OctaFX Ponzi scheme under the Prevention of Money Laundering Act (PMLA), 2002. The agency confirmed that the scam’s alleged mastermind, Spanish national Pavel Prozhorov, has been arrested in Spain following a coordinated operation with international law enforcement agencies.
According to ED officials, the OctaFX fraud represents a well-orchestrated global money-laundering network that used the façade of online forex and cryptocurrency trading to lure Indian investors with promises of exceptionally high returns.
A Two-Year Fraud Disguised as High-Yield Trading
Investigations revealed that OctaFX promoted itself as an “international forex and crypto trading platform” and promised guaranteed monthly returns ranging from 10% to 25%—figures impossible in legitimate financial markets.
Between July 2022 and April 2023, the company systematically defrauded Indian citizens of ₹1,875 crore by initially paying small profits to gain trust, before diverting massive sums abroad through a complex web of digital wallets and offshore accounts.
The ED estimates that OctaFX and its associated entities made illicit profits of nearly ₹800 crore during this period.
The agency further noted that from 2019 to 2024, OctaFX’s total illegal earnings from India exceeded ₹5,000 crore, much of which was laundered through foreign jurisdictions under the guise of trading settlements and crypto transactions.
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Operating Without RBI Authorization
A crucial part of the investigation revealed that OctaFX operated in India without authorization from the Reserve Bank of India (RBI). Despite lacking a license, it projected itself as a legitimate global trading platform, misleading investors through false marketing, fake certifications, and social media influencers.
ED officials stated that under Indian law, any entity offering forex or derivative trading services must obtain prior approval from the RBI and SEBI (Securities and Exchange Board of India). OctaFX bypassed both regulators, effectively running a Ponzi scheme under the cover of digital trading.
Illegal Gains Used to Buy Foreign Assets
The investigation uncovered that the proceeds from the fraud were laundered and invested across multiple countries including Spain, Dubai, Cyprus, Estonia, and Singapore.
Pavel Prozhorov allegedly used the illicit funds to acquire 19 luxury real estate properties, high-value cryptocurrencies, and a luxury yacht in Spain.
To date, the ED has attached assets worth ₹2,681 crore, which include cryptocurrency wallets, offshore bank accounts, luxury properties, and marine assets. The agency is also coordinating with Interpol and Europol to trace additional holdings linked to Prozhorov and his associates.
Charge Sheets Filed Against 55 Entities
The ED has filed two charge sheets before a Special PMLA Court against 55 entities and individuals, including OctaFX India Pvt. Ltd., multiple shell companies, payment gateway operators, and facilitators allegedly involved in laundering the fraud proceeds.
Officials confirmed that the agency is now probing international crypto exchanges and hawala networks that may have helped move funds out of India. The ED has also sought assistance from Spanish, Estonian, and UAE financial intelligence units for cross-border asset recovery.
Regulatory Loopholes and Investor Risk
By exploiting public fascination with crypto and forex trading, the accused managed to attract tens of thousands of retail investors through mobile apps, Telegram groups, and referral bonuses.
An ED official remarked:
“OctaFX misused the lack of investor awareness and regulatory oversight to run a multi-crore Ponzi operation. This case is a wake-up call for retail investors to verify whether any platform is registered with RBI or SEBI before investing.”
A Warning from the Enforcement Directorate
The ED has issued a public advisory warning investors against engaging with unauthorized online trading and crypto platforms, stressing that such entities pose serious financial and cybersecurity threats.
The agency stated:
“Foreign-based forex and crypto schemes promising guaranteed returns are illegal under Indian law. Investors should exercise extreme caution and verify credentials through official channels before parting with their money.”
