TLDR
- ED seized $286 million crypto under money laundering law.
- OctaFX duped Indian investors of $225 million in one year.
- Spanish police arrested OctaFX mastermind Pavel Prozorov.
- $321 million assets including a yacht and 19 properties attached.
India’s Enforcement Directorate (ED) has seized cryptocurrency worth about $286 million and arrested Pavel Prozorov, a Spanish national accused of operating the OctaFX Ponzi scheme. The action marks one of India’s largest digital asset crackdowns linked to money laundering and unauthorized forex trading activities targeting Indian investors.
Crypto Seizure and Arrest Under PMLA
The Enforcement Directorate confirmed that the provisional attachment order was issued under the Prevention of Money Laundering Act (PMLA). Spanish authorities detained Pavel Prozorov following an international request citing his role in global cybercrimes connected to the OctaFX network.
According to the ED, the OctaFX platform posed as a legitimate forex and cryptocurrency trading service without authorization from the Reserve Bank of India (RBI). Investors were promised high returns through currency and crypto trading. However, the agency found that the platform systematically redirected deposits to offshore entities and shell companies.
Multi-Country Operations and Investor Losses
Investigations revealed that OctaFX defrauded Indian investors of around $225 million between July 2022 and April 2023, earning about $96 million in profits during that period. From 2019 to 2024, the operation reportedly generated more than $600 million in profits from India alone.
The ED stated that OctaFX followed a Ponzi-style model. Early investors received small returns to gain trust, while funds from new investors were used to sustain payouts and expand the scheme. The fraud affected thousands of individuals across multiple Indian cities, with funds traced to accounts in several countries.
Layering Through Global Network
The investigation exposed a distributed international network designed to conceal money trails. Marketing and promotional operations were managed by entities in the British Virgin Islands, while Spanish-based companies hosted servers and handled back-office systems.
Estonian firms were responsible for payment gateways, Georgian entities provided technical and IT support, and a Cyprus-based company served as the holding structure for the Indian business. Dubai-based companies, coordinated by Russian nationals, managed Indian operations, while Singapore entities helped channel funds overseas under the pretext of exporting software and research services.
Funds were collected through UPI payments and local bank transfers in India. The ED found that these funds were routed through dummy companies and individual accounts, then layered through multiple jurisdictions. Some of the proceeds were reintroduced into India as Foreign Direct Investment (FDI) to disguise the illegal source of money.
Assets Attached and Ongoing Investigation
The Enforcement Directorate has so far attached assets worth approximately $321 million, which include 19 immovable properties and a luxury yacht in Spain owned by Prozorov. The crypto seizure of $286 million makes this one of the largest digital asset enforcement actions in India’s history.
The ED also confirmed the filing of two chargesheets before a special PMLA court against 55 entities, including companies and individuals involved in the laundering network. The agency stated that OctaFX’s complex global structure was created to bypass regulatory oversight and obscure the origin of illicit funds.
Investigations remain ongoing as authorities continue to track offshore accounts and assets linked to the OctaFX network. The ED said it is working with foreign agencies to identify additional beneficiaries and partners involved in laundering funds through the global crypto and forex system.
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