Supreme Court of India on PMLA Enforcement against OctaFX Forex Trading Platform.

Headnote:

The Enforcement Directorate (ED), under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, issued a provisional attachment order attaching movable assets in the form of cryptocurrencies worth approximately Rs. 2,385 Crore in connection with ongoing investigation into the unauthorized forex trading platform OctaFX. The mastermind, Pavel Prozorov, was arrested in Spain by Spanish authorities for cybercrimes affecting multiple countries. The investigation revealed that OctaFX systematically defrauded Indian investors and laundered proceeds through an elaborate international network.

Background:

1. The investigation was initiated following an FIR registered by Shivaji Nagar PS, Pune, against multiple individuals defrauding investors via OctaFX.
2. OctaFX operated as an unauthorized online forex, commodities, and crypto trading platform without RBI approval.
3. From July 2022 to April 2023, investors in India were defrauded of approximately Rs. 1,875 Crore, generating profits of around Rs. 800 Crore. Total illicit profits from 2019–2024 are estimated to exceed Rs. 5,000 Crore, much of which was transferred abroad.
4. The platform ran a Ponzi-style scheme, offering early investors small returns to build credibility.

Court / ED Observations:

1. OctaFX operated through a distributed global network to evade regulatory scrutiny:
2. BVI: Marketing operations
3. Spain: Servers and back-office
4. Estonia: Payment gateways
5. Georgia: Technical support
6. Cyprus: Holding company for Indian entity
7. Dubai: Oversight of Indian operations via Russian promoters
8. Singapore: Export of fake services to launder funds
9. Investor funds were collected via UPI and local bank transfers, routed through dummy entities and multiple mule accounts, and laundered abroad under the guise of fake imports of software and R&D services.
10. A portion of laundered funds was reintroduced into India as FDI; other funds were used for luxury consumption, property acquisition, yacht purchase, and cryptocurrency holdings.
11. OctaFX manipulated trading operations with falsified candlestick charts and deliberate slippage, ensuring investor losses, and ran an Introducing Brokers (IB) scheme offering commissions for referrals.

Enforcement Actions:

1. Assets attached: Over Rs. 2,681 Crore, including 19 immovable properties and a luxury yacht in Spain.
2. Prosecution Complaint (PC) and Supplementary PC filed against OctaFX and 54 accused before the Hon’ble Special Court (PMLA), which has taken cognizance.
3. Investigation and enforcement actions are ongoing.

Legal Provisions Discussed:

1. Prevention of Money Laundering Act, 2002 – Attachment of proceeds of crime, investigation, and prosecution of money laundering offenses.
2. Indian Penal Code & Cybercrime Laws – Fraud, cheating, and unauthorized financial operations.
3. Foreign Exchange Laws & RBI Regulations – Unauthorized forex trading and cross-border fund transfers.

Citation: 2025:SC:EDPMLA:001

Case: Directorate of Enforcement v. OctaFX & Ors.

Court: Special Court (PMLA), Mumbai / Directorate of Enforcement, Mumbai Zonal Office

Case / File No.: Provisional Attachment & Investigation under PMLA, 2002