India’s Enforcement Directorate has seized cryptocurrency worth $286 million under anti-money laundering laws.
Summary
- ED seizes $286M in crypto under anti-money laundering probe into OctaFX.
- Pavel Prozorov, the OctaFX mastermind, was arrested in Spain for cybercrimes.
- OctaFX duped Indian investors of $225M through global Ponzi network.
They also announced the arrest of Pavel Prozorov, the alleged mastermind behind the multi-billion-dollar OctaFX Ponzi scheme.
Spanish authorities arrested Prozorov based on his involvement in cybercrimes affecting multiple countries, according to an ED statement.
The provisional order issued under the Prevention of Money Laundering Act attaches the cryptocurrency holdings as part of an ongoing investigation into the unauthorized forex trading platform OctaFX.
The platform allegedly duped Indian investors of $225 million between July 2022 and April 2023.
They also reportedly generated profits of approximately $96 million through a multi-country operation that operated from 2019 to 2024.
Distributed global network evaded regulatory scrutiny
The ED probe found that OctaFX operated through a distributed global network designed to evade regulatory oversight and layer illicit funds across multiple jurisdictions.
Marketing activities were managed by entities in the British Virgin Islands, with Spanish-based entities and individuals hosting servers and back-office operations.
Estonian entities handled payment gateways, Georgian operations provided technical support, and a Cyprus-based company served as the holding entity for Indian operations.
Dubai-based entities oversaw Indian activities through Russian promoters, while Singapore entities facilitated the export of bogus services to launder funds abroad.
OctaFX presented itself as an online forex trading platform for currency, commodities and crypto trading without Reserve Bank of India permission.
Total profits from India are estimated to exceed $600 million, with a significant portion of this amount illicitly transferred overseas through the use of fake imports of software and R&D services.
The funds were routed to entities controlled by Prozorov in Spain, Estonia, Russia, Hong Kong, Singapore, UAE, and the UK.
OctaFX layering scheme used UPI and FDI routes
OctaFX collected investor funds through UPI payment systems and local bank transfers. They then routed them through dummy Indian entities and individual accounts before layering across multiple mule accounts.
A portion of the laundered funds was later reintroduced into India as foreign direct investment, creating a circular flow that obscured its illicit origins.
The ED has attached total assets worth $321 million in this case. This includes 19 immovable properties and a luxury yacht in Spain owned by Prozorov. The seizures are one of India’s most significant cryptocurrency-related enforcement actions under money laundering laws.
Source: https://crypto.news/octafx-ponzi-takedown-indias-ed-seizes-286m-in-crypto-mastermind-arrested/
