The Enforcement Directorate (ED) has frozen account balances to the tune of ₹21.14 crore of OctaFX and related entities in connection with an alleged illegal online forex trading case.
The agency had earlier conducted searches on various premises of OctaFX India Private Limited and related concerns under the Foreign Exchange Management Act (FEMA) following allegations of illegal online foreign exchange trading through international brokers named OctaFx trading app and website www.octafx.com.
The FEMA investigation revealed that the online trading app and website were operating in India in association with OctaFx, said the agency. “This forex trading platform is widely promoted on social networking sites and is also following referral-based incentive models for acquiring users to their platforms... funds are collected from users, mainly through UPI/local bank transfers and are channelled through dummy entities,” it said.
The ED alleged that the funds were credited to the bank accounts of various dummy entities and domestically transferred to other banks for layering, following which cross-border transactions were undertaken. “The said app and its website have not been authorised by the Reserve Bank of India to deal in forex trading. The conduct and operations of forex trading, not being conducted on a recognised stock exchange, is illegal, and also violates FEMA regulations,” said the agency.
The ED has also alleged that multiple accounts of different Indian banks were being shown to the investors or app users for collecting funds in the guise of facilitating forex trading. The collected money was simultaneously transferred to several “e-wallet accounts such as Neteller, Skrill or to bank accounts of dummy entities”.
A significant portion of the allegedly defrauded amount was used to buy cryptocurrencies/assets through Zanmai Labs Private Limited. “Zanmai labs provided banking channels and a bridge to deposit the INR to WazirX wallets, which ultimately were being transferred to Binance exchange (a crypto exchange based in Cayman Islands) leading to the transfer of Indian currency to overseas entities in the form of cryptocurrencies,” the ED alleged.
