Published on: October 17, 2025 | 5:34 PM IST

New Delhi: The Enforcement Directorate (ED) on Friday announced a major action in the multi-crore OctaFX Ponzi scam, issuing a provisional order to attach movable properties in the form of cryptocurrency valued at approximately ₹2,385 crore. The agency has also seized other assets linked to the alleged scam, marking a significant step in its ongoing investigation under the Prevention of Money Laundering Act (PMLA).

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Background of the Scam

The OctaFX case involves a foreign exchange trading platform, which allegedly duped thousands of investors across India and other countries.

• According to the ED, many Indian investors were systematically cheated of ₹1,875 crore between July 2022 and April 2023.
• The platform, OctaFX, promised high returns on currency, commodities, and cryptocurrency trades but operated without approval from the Reserve Bank of India (RBI).
• The alleged modus operandi included giving initial investors small profits to build trust, a hallmark of typical Ponzi schemes.

Investigations revealed that the firm operated from 2019 to 2024, generating profits of over ₹5,000 crore from India alone during this period. Much of the money was illicitly transferred abroad to evade regulatory oversight.

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Action Taken by the ED

The Enforcement Directorate has taken multiple steps to curb the financial fallout from the scam:

• Provisional attachment of cryptocurrency worth ₹2,385 crore, marking one of the largest crypto-related seizures linked to a Ponzi scheme in India.
• Attachment of assets worth over ₹2,681 crore, including 19 immovable properties and a luxury yacht in Spain, all owned by the alleged mastermind Pavel Prozorov.
• Arrest of Pavel Prozorov by Spanish Police Authorities for his alleged involvement in cybercrimes across multiple nations.

The ED has described the operations of OctaFX as highly structured to evade detection, using a distributed global network to operate across borders while avoiding regulatory scrutiny.

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Modus Operandi of OctaFX

The investigation revealed how OctaFX lured investors and maintained the facade of legitimacy:

1. Promises of High Returns: Investors were encouraged to trade in forex, commodities, and cryptocurrencies with the allure of high profits.
2. Small Initial Gains: Early investors received modest returns, building trust and encouraging more substantial investments—a typical Ponzi tactic.
3. Illicit Transfers: A significant portion of funds raised from Indian investors was transferred abroad without regulatory approvals.
4. Global Network: The firm maintained operations in multiple countries, making it difficult for any single regulator to trace its full scale and transactions.

The ED termed the scam as a “systematic duping” of Indian investors and highlighted the international nature of the alleged crimes, which involved cross-border transactions and cyber-enabled financial frauds.

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Legal Framework and Enforcement

The action was carried out under the Prevention of Money Laundering Act, 2002 (PMLA), which empowers the ED to attach properties involved in money laundering and fraudulent activities.

• Under PMLA provisions, movable and immovable assets, including cryptocurrency holdings, can be provisionally attached pending further investigation and judicial approval.
• The ED has also collaborated with international law enforcement agencies, including Spanish police, to apprehend individuals involved in the scam and recover assets across jurisdictions.

This move demonstrates India’s growing regulatory focus on cryptocurrency-related frauds and cross-border Ponzi schemes, highlighting the need for vigilance among investors.

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Impact on Indian Investors

• Thousands of Indian investors lost money in this scheme, some of whom had invested life savings expecting safe returns.
• The ED’s action is expected to recover substantial portions of these funds through the attachment of crypto assets and other movable and immovable properties.
• The case serves as a warning to investors about unregulated foreign exchange trading platforms and the risks of high-return promises without regulatory oversight.

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Significance of Cryptocurrency Attachment

The OctaFX case marks one of the largest seizures of cryptocurrency in India linked to a financial scam, signaling the government’s intent to bring crypto-fraud under stricter scrutiny.

• Crypto assets, being borderless and decentralized, pose challenges in enforcement and asset recovery.
• By attaching ₹2,385 crore in crypto, the ED has strengthened legal precedents for cryptocurrency seizure under PMLA.
• The move also sends a message to other potential Ponzi operators using digital assets that Indian authorities are actively monitoring and capable of taking action.

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International Cooperation

Pavel Prozorov’s arrest in Spain reflects the importance of cross-border collaboration in tackling complex financial crimes.

• The ED is coordinating with international agencies to trace, freeze, and recover illicitly transferred funds.
• The OctaFX investigation also demonstrates the global nature of financial cybercrime, where perpetrators leverage international networks to commit fraud.

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ED’s Statement and Future Steps

In a statement, the ED emphasized:

“OctaFX presented itself as an online forex trading platform without RBI permission. Many Indian investors were systematically duped, and its operations spanned several countries. The agency will continue to investigate and attach assets to recover funds for investors.”

The ED has also highlighted that the probe is ongoing, and further arrests and asset attachments may follow as investigations continue in India and abroad.

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Conclusion

The OctaFX Ponzi scam is one of the largest financial frauds involving cryptocurrency in India. The ED’s action to attach ₹2,385 crore in crypto, along with immovable properties and luxury assets, demonstrates the agency’s resolve to curb financial crimes and protect investors’ interests.

With the alleged mastermind arrested in Spain and assets seized, the case also underscores the importance of international cooperation in tackling cross-border cyber-enabled financial frauds. For investors, the case serves as a stern reminder to exercise caution when dealing with unregulated trading platforms, especially those promising unusually high returns.