(MENAFN- Live Mint) The Enforcement Directorate has achieved a major breakthrough in the OctaFX Ponzi sacm case, with the arrest of the Spanish 'mastermind' of the same, Pavel Prozorov, in his own country.

On Friday, a provisional order was issued under the Prevention of Money Laundering Act (PMLA ) to attach cryptocurrencies worth ₹2385 in the connection with the case.

What are the allegations against the company?

According to the Enforcement Directorate, OctaFX "systematically duped" Indian investors of ₹1875 crore in the time period of July 22 to April 2023. This generated the company, which used a multi-country operation, to generate illicit profits of ₹800 crore.

"OctaFX presented itself as an online forex trading platform for currency, commodities and crypto trading without RBI permission...The initial investors received small profits to build trust, as is generally seen in a typical Ponzi scheme," the ED said, as per PTI.

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The probe carried out by ED has revealed that the company had a "distributed global network" which was designed to "evade" regulatory scrutinisations while it collected illicit funds.

Most of the marketing activities of the company were done by hired entities from the British Virgin Islands. Their servers as well as back-office operations were carried out in Spain, payment gateways were run entities in Estonia, while some in Georgia assisted with technical support. The "holding" company for the Indian entity was based out of Cyprus.

The ED also said that there were entities in Dubai to oversee the Indian operations while some Russians based out of Singapore handled the export of bogus services to funds that launder money abroad.

How was the scam carried out?

OctaFX collected funds from investors via UPI and local bank transfers, which were then routed through dummy entities and individual accounts and layered across multiple mule accounts.

These layered funds were then sent abroad as payments for bogus imports of software as well as research and development-related services.

OctaFX fund laundering process.

The mastermind of the entire operation, Pavel Prozorov, controls several entities in Spain, Russia, Estonia, Hong Kong, UAE, Singapore, and the UK, which would receive these payments. Moreover, a part of the laundered funds would later be reintroduced into India as foreign direct investment (FDI), as per the central agency.

The ED has currently filed two chargesheets against 55 entities before a special PMLA court.

Assets worth around ₹2681 crore were attached by the ED in the case. This also includes 19 immovable properties and a luxury yacht in Spain owned by Prozorov.

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