The Enforcement Directorate (ED) have frozen several bank accounts containing Rs. 21.14 crore of “M/s OctaFX”, an online forex trading company, and several related entities of it.
Earlier this year in February, the RBI had warned the general public not to conduct forex transactions on unauthorized electronic trading platforms (ETPs). RBI also specified that a resident can make forex transactions only with authorized entities under the Foreign Exchange Management Act, 1999 (FEMA).
Various premises of M/s OctaFX India Private Ltd. were searched by ED for bypassing the provisions under FEMA for illegal online forex trading through international brokers namely OctaFx Trading app and their website. Further investigation revealed that OctaFX is heavily promoted throughout social networking websites and are luring in users through referral-based incentives for their platform. The funds are collected mainly through bank transfers and UPI which are then sent to dummy entities and then sent to other banks for layering purposes and ultimately crosses borders through international transactions.
The official OctaFX app and website are not authorized by RBI for forex trading. Forex trading which is not conducted on recognised stock exchanges is illegal and violates FEMA regulations. The investigation shows multiple bank accounts of OctaFX were used to collect funds for forex trading. They were then quickly transferred to various e-wallets or bank accounts of dummy entities after scamming the users.
A large amount of defrauded money was then used to buy crypto currencies through M/s Zanmai Labs Pvt. Ltd. which served as a banking channel and a bridge to deposit the Indian Rupee to Wazirx wallets which was then transferred to Binance exchange (crypto exchange based out of Cayman Island) and, ultimately, sent to other countries as crypto currencies. The ED stated in their press release that further investigation is underway.