OctaFX Under Fire: ED Uncovers Rs 1,610 Crore Forex Scam Using Mule Accounts And Fake Gateways

Image Source : The Hindu

India’s Enforcement Directorate (ED) has intensified its crackdown on illegal online forex trading platforms, revealing a massive Rs 1,610 crore fraud linked to international broker OctaFX. The agency conducted coordinated raids across multiple cities, exposing a complex web of mule accounts, unauthorised payment aggregators, and shell companies used to siphon investor funds.

Key Revelations From The Investigation

- The ED raided seven locations in Mumbai, Delhi, Chennai, and Gurugram, seizing incriminating documents and digital devices
- OctaFX, operating in India through OctaFx India Pvt Ltd, was found to be functioning without authorisation from the Reserve Bank of India
- Investor funds were routed through mule accounts into escrow accounts of an unauthorised payment aggregator, Dinero Payment Services
- Shell companies posing as e-commerce platforms were onboarded using fake KYC documents to access payment gateways and mask fund flows
- Nearly 50 percent of user funds were diverted to mule payout accounts under the guise of refunds, vendor payments, and chargebacks

Modus Operandi And Fund Layering

- OctaFX disguised investor deposits as online purchases, layering them through multiple accounts to obscure their origin
- Funds were ultimately disbursed as fake forex or betting payouts, making it difficult for authorities to trace the money trail
- The platform used URL masking techniques to hide the identity of payment gateways, further complicating regulatory detection
- A network of chartered accountants and professionals allegedly facilitated the creation of dummy entities and issued fake remittance certificates

Enforcement Action And Asset Seizure

- The ED has now frozen and attached assets worth Rs 1,610 crore, including properties in Spain, cryptocurrencies, bank balances, and gold coins
- Earlier seizures included Rs 2.7 crore in bank accounts and Rs 160.8 crore in movable assets, with the latest update marking a significant escalation in the case
- Investigators are also probing the role of foreign-based operators in Russia, Spain, Georgia, and Dubai who are believed to be managing the platform

Future Outlook

The OctaFX case underscores the growing threat of unregulated forex trading platforms exploiting digital loopholes and investor naivety. With the ED tightening its surveillance and enforcement, further arrests, international cooperation, and asset seizures are expected as the investigation progresses.

Sources: India Today, Times of India, Hindustan Times, Enforcement Directorate Press Release.