The Indian anti-money laundering agency has announced that Pavel Prozorov, described as “the mastermind behind the platform OctaFX”, was arrested in Spain by local police for his alleged “involvement in cybercrimes affecting multiple countries.”

"As a global broker, Octa is neither involved in nor has any information about Pavel Prozorov's affairs," an Octa representative told FinanceMagnates.com. "Any suggestion to the contrary would be purely speculative."

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Furthermore, the Enforcement Directorate (ED) in India has attached about “2,385 crore rupees” ($271 million) in its ongoing investigation against OctaFX, which it labels as an “unauthorised forex trading platform.”

Earlier, the Indian authorities attached other assets, including 19 immovable properties and a luxury yacht. The total value of the attached assets in the case has now reached “2,681 crore rupees” ($304.7 million).

The attachment order from the ED, which handles financial crime investigations in India, prevents the sale, gifting, mortgaging, or transfer of the listed assets. The owner may keep and use the assets while the investigation is ongoing.

"We strongly refute any allegations of money laundering, promises of quick riches and high returns, and trading manipulations," the Octa representative added.

Authorities After Prozorov

The arrest of Prozorov in Spain came months after the Cypriot financial market regulator stripped him of his voting rights from the Cyprus-regulated entity.

“OctaFX manipulated trading operations, using falsified candlestick charts and deliberate slippage, ensuring consistent investor losses,” the press release of the Indian ED noted. “OctaFX floated an Introducing Brokers (IB) scheme to lure more investors, wherein individuals and entities referring clients were offered hefty commissions based on client trading activity.”

Octa, however claims that its "analytics are based on up-to-date market data provided by global and officially verified price sources."

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According to the ED, OctaFX “systematically duped Indian investors” of about 1,875 crore rupees (over $213 million) between July 2022 and April 2023, generating profits of around 800 crore rupees (about $91 million).

As the company operated in the country from 2019 until 2024, the authorities estimate its profits from the subcontinent to exceed 5,000 crore rupees ($568.1 million).

The Indian agency even compared OctaFX to a “typical Ponzi scheme” and stated that the entity transferred much of its gains from the country overseas.

OctaFX laundered its Indian gains, the ED alleged, using “unauthorised payment aggregators” to entities controlled by Prozorov across several countries. A portion of the laundered funds was even reintroduced into India as foreign direct investment, according to the agency.

Meanwhile, the Indian unit settled with the local financial regulator, paying $37,000, over its alleged links with the global forex and contracts for differences (CFDs) trading platform. The entity also had to surrender its local license. Hpwever, Octa earlier refuted on any operational association with the Indian entity.

A Network of Entities

The ED investigation also found that OctaFX operated with the service and support of several offshore entities: British Virgin Islands entities handled marketing, Spanish entities and individuals hosted servers and back-office operations, Estonian entities managed payment gateways, and Georgian entities provided technical support.

Moreover, the Indian OctaFX entity was owned by a Cyprus holding company, while Dubai-based entities and individuals oversaw the Indian operations through Russian promoters. The ED also alleged that entities in Singapore facilitated the export of bogus services to launder funds abroad.

OctaFX even employed Indians in Russia and Spain to provide local support to its Indian clients, the agency claimed.

Recently, the global brand Octa revealed its legal structure, stating that it is operated on a brand-sharing basis by entities in Comoros, Mauritius, South Africa, Cyprus, and Saint Lucia.

"The global broker Octa is operating in accordance with the laws and regulations of the jurisdictions in which it is registered and conducts business. Octa adheres to the high international industry standards and best market practices across all its activities, including the implementation of KYC and AML compliance programs," the Octa representative added.

"The global broker Octa is not involved in any legal proceedings in India."

Source: Finance Magnates