Illegal Forex Trading Case: ED Conducts Search Operations In 4 Cities; Freezes Assets Worth ₹80 Crore

The Enforcement Directorate (ED) Mumbai conducted searches on July 22 at various locations in Mumbai, Kolkata, Delhi, and Gurgaon as part of an ongoing investigation into the case of illegal online forex trading through international brokers, namely the OctaFx trading app and the website octafx.com.

During the searches, movable properties in the form of bank funds and demat account holdings totaling approximately Rs 80.43 crore were frozen. Various incriminating documents and digital devices were also recovered and seized, the financial probe agency said on Wednesday. The total attachment and freezing in the case to date amount to approximately Rs 118 crore.

The search operations unveiled evidence revealing that a portion of the funds deceitfully obtained from investors under the guise of forex trading on OctaFx had been funneled into SEBI-registered Alternative Investment Funds (AIFs) to present them as legitimate funds. Furthermore, it was discovered that OctaFx utilized entities based in the British Virgin Islands (BVI) and Estonia to transfer funds for its promotional activities to lure investors. This has been corroborated by celebrities and production houses who have participated in OctaFx’s promotional campaigns across different platforms.

Recently, the ED recorded the statements of television actors Krystle D'Souza and Karan Wahi in connection with the case. It is alleged that these actors were involved in promoting and endorsing the app, especially during the COVID-19 period. They were associated with the illegal forex trading app OctaFx in 2020-21 and promoted the app and website that were trading illegally. They also endorsed the "Learn to Trade" show during the COVID period, purportedly aimed at helping people trade from home. The show "Learn to Trade" was hosted by Karan Wahi, with television actresses Krystle D'Souza and Nia Sharma also participating. Additionally, they promoted a marathon competition to achieve $1000 goals by sharing videos on social media.

During the search operations, it was also revealed that OctaFx had established several shell companies and utilized their bank accounts under the pretense of facilitating forex trading. These entities layered funds through fraudulent e-commerce websites created by them to circumvent restrictions imposed by payment gateways and to hide the nature of such incoming funds. Additionally, it was uncovered that OctaFx employed technical experts to help create a payment aggregator for bypassing beneficial owner regulations. This payment aggregator was instrumental in redirecting misappropriated funds, thereby enabling OctaFx to receive money from unsuspecting investors.

The ED is investigating a case registered by Pune’s Shivaji Nagar police station against multiple individuals accused of duping victims into forex trading through the OctaFx platform. It’s alleged that OctaFX India Pvt Ltd and OctaFX cheated investors out of over Rs 1000 crore through illegal forex trading, part of which was transferred abroad through complex transactions disguised as bogus freight services and other means.

The ED investigation revealed that the OctaFx online trading app and website are operating in India in association with India-based entity M/s OctaFx India Private Limited. The said app (OCTAFX) and its website have not been authorized by the RBI to deal in Forex Trading. M/s OctaFx India Pvt Ltd, OctaFx, and their entities have cheated investors under the guise of forex trading, thereby earning a profit of more than Rs 1,000 crore from the Indian region. A portion of these funds was layered through a web of complex transactions with the help of shell entities and remitted abroad to its related entities in the guise of bogus freight services and import of services. All these activities are being managed and operated by the owners of OctaFx group entities based in Russia, Spain, Georgia, and Dubai. Based on the investigation conducted and PoC identified so far, assets to the tune of approximately Rs 38 crore in the form of cryptocurrencies, bank balances, gold coins, were attached by the ED.

Published on: Thursday, July 25, 2024, 01:42 AM IST