India's Enforcement Directorate (ED) has seized cryptocurrency worth $286 million under anti-money laundering laws as part of an ongoing probe into the unauthorized forex trading platform OctaFX. The alleged mastermind, Pavel Prozorov, was arrested in Spain for cybercrimes affecting multiple countries, according to an ED statement.
OctaFX operated as a Ponzi scheme, duping Indian investors of $225 million between July 2022 and April 2023, with total profits from India estimated to exceed $600 million. The platform presented itself as an online forex, commodities, and crypto trading service without Reserve Bank of India permission.
The scheme used a distributed global network to evade regulatory oversight, with marketing managed by entities in the British Virgin Islands, servers hosted in Spain, payment gateways handled in Estonia, technical support from Georgia, and a Cyprus-based company serving as the holding entity for Indian operations. Dubai-based entities oversaw Indian activities through Russian promoters, while Singapore entities facilitated fund laundering through bogus services.
Funds were collected via UPI payment systems and local bank transfers, routed through dummy Indian entities and mule accounts before being layered across jurisdictions. A portion was reintroduced into India as foreign direct investment to obscure illicit origins. The ED issued a provisional order under the Prevention of Money Laundering Act (PMLA), attaching cryptocurrencies worth Rs 2,385 crore (~$286 million). Total assets seized amount to $321 million, including 19 immovable properties and a luxury yacht in Spain owned by Prozorov.
This action represents one of India's most significant cryptocurrency-related enforcement measures under money laundering laws, highlighting international cooperation in combating financial fraud.
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