‘Illegal’ forex trading firm dupe investors of Rs 800 cr, reveals ED

An “illegal” online forex trading platform, OctaFX, which was operating in the country without the RBI’s authorisation, allegedly defrauded investors of Rs 800 crore in less than a year, revealed investigations by the Directorate of Enforcement (ED).

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The anti-money laundering agency raided seven locations across Mumbai, Delhi and Gurugram in connection with the case and seized several incriminating documents and digital devices.

According to sources, the probe revealed that OctaFX, in partnership with M/s OctaFx India Pvt Ltd, operated in India without the authorisation of the Reserve Bank of India. The firm defrauded investors on the pretext of forex trading and “generated” over Rs 800 crore in less than a year.

Searches revealed that OctaFX reportedly routed investor funds through mule accounts into escrow accounts of unauthorised payment aggregator, Dinero Payment Services. Shell firms posing as e-commerce platforms were also brought on board using fake KYCs to access payment gateways and avoid detection.

Funds of investors were reportedly disguised as online purchases, layered through multiple accounts, and ultimately disbursed as fake forex or betting payouts to obscure their origin.

It was further revealed that approximately 50 per cent of the user funds were diverted from the OctaFX platform to mule payout accounts. These accounts were used to disburse money under the false pretence of e-commerce refunds, chargebacks and vendor payments, effectively concealing the actual flow and purpose of the funds.

Search operations uncovered that OctaFX reportedly used URL masking techniques to disguise the identity of payment gateways and evade regulatory detection. Instead of directing users to clearly identifiable payment links, they allegedly used misleading or generic URLs, making it difficult for banks and the authorities to trace the transactions back to unauthorised or illicit sources.

Till date, the ED has attached, seized or frozen assets worth Rs 160.8 crore, including properties in Spain, and filed two prosecution complaints.

The agency had also conducted search operations on June 13 under the Prevention of Money Laundering Act (PMLA) at seven locations in Mumbai, Delhi, Chennai and Gurgaon as part of an ongoing probe in the case of illegal online forex trading through international brokers -- OctaFx Trading App and website, www.octafx.com.

The probe was initiated on the basis of an FIR registered by the Shivaji Nagar police station in Pune against individuals accused of duping investors with false promises of high returns via the OctaFX forex trading platform.