ED freezes Rs 80-cr worth bank deposits, demat holdings in 'fraud' forex trading app case

New Delhi, Jul 24 (PTI) The Enforcement Directorate on Wednesday said it has frozen bank deposits and demat holdings worth more than Rs 80 crore after it conducted searches in a money laundering case linked to the operations of an "illegal" online forex trading platform that is alleged to have duped investors to the tune of Rs 500 crore.

The raids were launched on July 22 at locations in Mumbai, Kolkata, Delhi and Gurugram in the case of OctaFx Trading App and website www. octafx.com.

"Funds deceitfully obtained from investors under the guise of forex trading on OctaFx has been funneled into SEBI registered Alternative Investment Funds (AIFs) as investments to present them as legitimate funds.

"OctaFx utilised entities based in the British Virgin Islands (BVI) and Estonia to transfer funds for its promotional activities to lure investors," the federal agency said in a statement.

This, it claimed, has been "corroborated" by celebrities and production houses who have participated in OctaFx's promotional campaigns across different platforms.

The agency has recorded the statement of some television actors early this month as part of this investigation.

OctaFx established several "shell" or fake companies and utilised their bank accounts under the pretense of facilitating forex trading, according to the ED.

"These entities layered funds through fraudulent e-commerce websites created by them to circumvent restrictions imposed by payment gateways and to hide the nature of such incoming funds," the agency said.

OctaFx, it was found, employed technical experts to "help create a payment aggregator" for bypassing beneficial owner regulations.

This payment aggregator was instrumental in redirecting misappropriated funds, thereby enabling OctaFx to receive money from unsuspecting investors, the probe found.

The money laundering case of the ED stems from a Pune Police (Shivaji Nagar police station) FIR filed against the app and its promoters who are alleged to have duped numerous investors by luring them with high returns.

OctaFx online trading app and website are operating in India in association with India based entity OctaFx India Private Limited.

"OctaFx India Pvt Ltd, OctaFx, and their entities have cheated investors in the guise of forex trading thereby earning a profit of more than Rs 1,000 crore from Indian region.

"Portion of these funds were layered through web of complex transactions with the help of shell entities and remitted abroad to its related entities in the garb of bogus freight services, import of services, etc," according to the agency.

All these activities are being managed and operated by the owner of OctaFx group entities based in Russia, Span, Georgia and Dubai, it said.

The federal agency had earlier said the app (OCTAFX) and its website were "not authorised" by RBI to deal in forex trading.

It had said the platform was widely promoted on social networking sites and is following referral-based incentive models for acquiring users.

Movable properties in the form of bank deposits, demat account holdings of about Rs 80.43 crore have been frozen and various "incriminating" documents and digital devices have been seized during the latest searches, the agency said.

With this fresh freezing of assets, the total attachment of properties in this case stands at Rs 118 crore. PTI NES KSS KSS