Spanish authorities have arrested the mastermind of the illegal foreign exchange trading platform OctaFX, Pavel Prozorov, said ED on Friday.
“Pavel Prozorov has been arrested from Spain by Spanish Police authorities, based on his involvement in cybercrimes affecting multiple countries,” ED said in a statement on Friday.
In its ongoing investigation in the OctaFX money laundering case, ED has also provisionally attached cryptocurrencies worth Rs 2,385 crores.
The anti-money laundering probe agency case stems from an FIR registered in Pune against investors who were first lured by high returns on OctaFX forex trading platform later duped and cheated, said ED.
MONEY LAUNDERING PROBE :
Probe agency claimed OctaFX duped Indian investors of around Rs 1875 crores in nine months between June 2022 – April 2023 and illegally generated profit of Rs 800 crores.
“OctaFX operated from 2019-24 and it’s estimated that total profit in India could be around Rs 5000 crores and most of it was illicitly routed overseas,” ED said on Friday.
HOW OctaFX Duped Investors
Without RBI approval, OctaFX presented itself as an online forex trading platform for currency, commodities and crypto trading.
“In the beginning investors received small profits to build trust, as is generally seen in a typical ponzi scheme. Probe has also revealed that OctaFX operated through a distributed global network designed to evade regulatory scrutiny and layer illicit funds across jurisdictions,” said the probe agency.
ED investigations revealed OctaFX Global Ops :
Marketing activities of OctaFX were handled by entities based in British Virgin Islands.
OctaFX key personnel based in Spain hosted servers and backend office operations.
Entities based in Estonia managed payment gateways
Companies in Georgia provided technical support.
An entity registered in Cyprus served as a holding company for the Indian entity of OctaFX.
Investigations further revealed companies and individuals based in Dubai via Russian promoters were overseeing Indian operations of OctaFX
Entities registered in Singapore carried out export of bogus services for money laundering.
“The probe revealed that OctaFX collected investor funds via UPI and local bank transfers, which were routed through dummy Indian entities and individuals’ accounts, layered across multiple mule accounts. Unauthorized payment aggregators facilitated the collection and outward movement of funds into shell companies posing as e-commerce platforms, effectively masking the true nature of the transactions,” said ED.
“The funds so collected were ultimately transferred abroad under the guise of fake imports of software and R&D services to entities controlled by Pavel Prozorov in Spain, Estonia, Russia, Hong Kong, Singapore, UAE, and the UK,” said ED.
Investigations revealed that proceeds of crime were used for global expansion of OctaFX and to buy luxury yacht. A part of illicit funds were parked in crypto currency wallets controlled byPavel Prozorov.
ED has so far attached assets worth over Rs. 2,681 Crore, including 19 immovable properties and a luxury yacht in Spain owned by Pavel Prozorov, said the agency.
