Ministry of Finance of India (through Enforcement Directorate of the Revenue Department) has announced that it has issued an interim order to seize movable assets in the form of cryptocurrencies worth about Rs. 2,385 Crore (US$318 million), in connection with an ongoing investigation against unauthorized forex trading platform OctaFX, for defrauding investors by falsely promising high returns.
The Enforcement Directorate (ED) said it has so far attached assets worth over Rs. 2,681 Crore ($358 million), including 19 properties and a luxury yacht in Spain owned by Pavel Prozorov, the controlling shareholder of OctaFX.
Pavel Prozorov was arrested by the Spanish police authorities, according to the ED.
Other regulator actions against OctaFX
We note that earlier this year, the Cypriot financial regulator CySEC suspended Pavel Prozorov’s voting rights for OctaFX’s CIF-licensed entity, Octa Markets Cyprus Ltd, stating that Pavel Prozorov’s influence “is harmful to the sound and prudent management of Octa Markets”. In June 2025 OctaFX and XM websites were blocked in Singapore.
Research ED
Back to the ED investigation, the ED said it revealed that OctaFX was systematically defrauding Indian investors of around Rs. 1,875 Crore ($250 million) between July 2022 and April 2023, generating earnings of around Rs. 800 Crore ($107 million). Considering the company’s operations from 2019 to 2024, the total revenue from India is estimated to exceed Rs. 5,000 Crore ($668 million), much of which has been smuggled abroad.
OctaFX was introduced as an online forex trading platform for trading currencies, commodities and cryptocurrencies, without the permission of RBI. Initial investors received small profits to build trust, as is generally seen in a typical Ponzi scheme. The ED investigation also revealed that OctaFX operated through a distributed global network designed to evade regulatory scrutiny and funnel illicit funds across jurisdictions.
The investigation revealed that the marketing activities were managed by entities in the British Virgin Islands (BVI). entities/individuals in Spain that host servers and back-office functions. entities in Estonia managed payment gateways; entities in Georgia provided technical support. an entity in Cyprus served as a holding company for the Indian entity. entities/individuals in Dubai were overseeing activities in India through Russian backers. and entities in Singapore facilitated the export of bogus services for money laundering overseas.
Deliberate slippage and heavy supplies
OctaFX manipulated trades, using falsified candlestick charts and deliberate slippage, ensuring consistent investor losses. The ED said OctaFX introduced an Introducing Brokers (IB) program to attract more investors, where individuals and entities referring clients were offered high commissions based on client trading activity. OctaFX has also employed Indians in Russia and Spain to provide local support to Indian clients.
The investigation revealed that OctaFX pooled investor funds through UPI and local bank transfers, which were routed through bogus Indian entities and individual accounts, into multiple mule accounts. Unauthorized payment aggregators facilitated the collection and outward movement of funds to shell companies posing as e-commerce platforms, effectively masking the true nature of the transactions. Aggregators provided merchant IDs and onboarding kits to these entities, enabling them to accept payments that appeared to be for legitimate goods or services.
Misuses of funds
The funds thus raised were eventually transferred abroad under the guise of fraudulent imports of software and R&D services to entities controlled by Pavel Prozorov in Spain, Estonia, Russia, Hong Kong, Singapore, the United Arab Emirates and the United Kingdom. Some of the laundered funds were later re-introduced into India as FDI.
The embezzled funds were used for luxury consumption, real estate acquisitions, the purchase of a luxury yacht and OctaFX’s global expansion. A portion of these funds were parked in cryptocurrency wallets controlled by Pavel Prozorov.
The ED said it has so far attached assets worth over Rs. 2,681 Crore ($358 million), including 19 properties and a luxury yacht in Spain owned by Pavel Prozorov. A Public Prosecutor’s Complaint (PC) along with a Supplementary PC has already been filed against OctaFx and other 54 accused persons/entities and the Hon’ble Special Court (PMLA) has taken cognizance of the same.
Further investigation is ongoing.