The enforcement directorate (ED) on Thursday said it has frozen the bank balance to the tune of Rs21.14 crore of OctaFx and related entities in the case of illegal online forex (foreign exchange) trading through international brokers namely OctaFx trading app and website octafx.com under FEMA (Foreign Exchange Management Act).
Earlier, ED had conducted searches at various premises of OctaFx India Private Ltd and related concerns under the provisions of FEMA in the case of illegal online forex trading through international brokers, namely, OctaFx trading app and website www.octafx.com.
The FEMA investigation revealed that the online trading app and website are operating in India in association with India-based entity OctaFx India Pvt Ltd.
The official said that this forex trading platform is widely promoted on social networking sites and is also following referral-based incentive models for attracting users to their platforms.
"It is observed that funds are collected from users, majorly through UPI, local bank transfers and are channelised through dummy entities. These funds are credited in the bank accounts of various dummy entities and domestically transferred to other banks for the purpose of layering. And later on cross border transactions have been undertaken," the ED claimed.
ED said that it has learnt about the nexus between international online forex trading brokers and their Indian partners/agents. The app (OctaFx) and its website have not been authorised by the Reserve Bank of India (RBI) to deal in forex trading.
The conduct and operations of forex trading (not being conducted on recognised stock exchange) is illegal and also violates FEMA regulations.
It has emerged during the investigation that multiple accounts of different Indian banks were being shown to investors, users on OctaFx trading app/www.octafx.com for collecting funds in the guise of facilitating forex trading.
The accumulated funds, after defrauding these investors/users, were simultaneously transferred to multiple e-wallet accounts such as Neteller, Skrill or to bank accounts of dummy entities.
"We have learnt that a major portion of the defrauded amount on this trading app was used to purchase crypto currencies through Zanmai Labs Pvt. Ltd. Zanmai labs is providing banking channels and a bridge to deposit the INR to Wazirx wallets which ultimately were being transferred to Binance exchange (a crypto exchange based in the Cayman Islands) leading to transfer the Indian currency to overseas entities in the form of crypto currencies," the official said.
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