Spanish police authorities have arrested Pavel Prozorov, the alleged mastermind behind the illegal foreign exchange trading platform OctaFX, the Enforcement Directorate (ED) said on Friday.
“Russian national Pavel Prozorov has been arrested from Spain by Spanish police authorities, based on his involvement in cybercrimes affecting multiple countries,” the ED said in an official statement.
As part of its ongoing probe, the ED has provisionally attached cryptocurrencies worth Rs 2,385 crore linked to Prozorov and entities associated with the trading platform.
Prozorov’s arrest is part of coordinated operations in India and Spain targeting OctaFX, which allegedly defrauded investors by promising high returns through forex trading. In the ongoing probe,ED played a key role in international cooperation. Last year, it sent a Mutual Legal Assistance Treaty (MLAT) request to Spain, sharing its investigation findings to facilitate formal cooperation in criminal investigations and prosecutions and seek their cooperation to formally seize the assets.
Through MLAT, the ED coordinated evidence sharing, witness statements, asset seizures, and other investigative processes. While the actual arrest was carried out under Spanish law, the ED’s cooperation was pivotal in providing the legal and investigative support necessary for the operation.
The probe traces its origins to a First Information Report (FIR) filed in Pune, Maharashtra, where investors were allegedly lured by promises of high returns and subsequently defrauded. Investigators said the scheme involved a sophisticated modus operandi, including international fund transfers, shell entities, and digital currencies, designed to obscure the movement of illicit capital across borders.
Investigations revealed that OctaFX systematically duped Indian investors of approximately Rs 1,875 crore between July 2022 and April 2023, generating profits of around Rs 800 crore. Considering operations from 2019 to 2024, total profits from India are estimated to exceed Rs 5,000 crore, much of which was allegedly transferred overseas. The platform presented itself as an online trading portal for currency, commodities, and crypto trading without RBI approval.
The probe indicates that OctaFX initially paid small profits to early investors to build trust, following a classic Ponzi scheme model.The probe also revealed that OctaFX operated through a distributed global network designed to evade regulatory scrutiny and layer illicit funds across jurisdictions. Marketing activities were handled by entities in the British Virgin Islands (BVI); servers and back-office operations were hosted by entities/persons in Spain; Estonia-based entities managed payment gateways; Georgia-based entities provided technical support; a Cyprus-based entity served as the holding company for the Indian operations; Dubai-based entities/persons, led by Russian promoters, oversaw Indian operations; and Singapore-based entities facilitated the export of bogus services to launder funds abroad.
The anti-money laundering probe agency also found that OctaFX manipulated trading operations, using falsified candlestick charts and deliberate slippage to ensure consistent investor losses. The platform floated an Introducing Brokers (IB) scheme to attract more clients, offering hefty commissions for referrals. Indian staff were employed in Russia and Spain to provide localized support for Indian investors.
Investigation revealed that OctaFX manipulated trading operations through falsified candlestick charts and deliberate slippage, ensuring consistent investor losses. The platform floated an Introducing Brokers (IB) scheme to attract more investors, offering hefty commissions to individuals and entities for referring clients based on their trading activity. Additionally, OctaFX employed Indian staff in Russia and Spain to provide localized support for Indian clients.
Investor funds collected via UPI and local bank transfers were routed through dummy Indian entities and layered across multiple mule accounts. Unauthorized payment aggregators facilitated these transactions, masking their true nature and transferring funds abroad under the guise of fake software and R&D imports to entities controlled by Pavel Prozorov across Spain, Estonia, Russia, Hong Kong, Singapore, UAE, and the UK. Some of the laundered funds were later reintroduced into India as FDI.
Proceeds from the fraud were reportedly used for luxury consumption, property acquisitions, global expansion of OctaFX, and the purchase of a luxury yacht. A portion of the funds was parked in cryptocurrency wallets controlled by Prozorov.
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So far, the ED has attached assets worth over Rs 2,681 crore, including 19 immovable properties and a luxury yacht in Spain owned by Prozorov. A Prosecution Complaint (PC), along with one supplementary PC, has already been filed against OctaFX and 54 other accused persons/entities in the Special Court (PMLA), which has taken cognizance of the matter.
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