NEW DELHI: The Enforcement Directorate (ED) has frozen Rs 21.14 crore of OctaFX India Private Limited and related entities which were held in various bank accounts after carrying out searches at their premises over allegations that the international brokers’s activities were in contravention of the Foreign Exchange Management Act (FEMA).
The London-based online forex broker was one among four principal sponsors of Indian Premier League franchise Delhi Capitals for the IPL’s 2022 season.
OctaFX initially joined DC as their Official Trading Partner ahead of the 2021 IPL as exclusive sponsor for all of the digital content the team produced for their in-house channel, DCTV.
In February, DC extended its partnership with Octa, making the platform one of their Principal Sponsors for IPL 2022. The Octa logo, thus, featured on the back of the DC matchday shirt.
Coming back to the present case, the probe under FEMA revealed that the international brokers — working though OctaFx Trading App and website www.octafx.com — operated in India through the entity, M/s OctaFx India Pvt. Ltd. This forex trading platform is widely promoted on social networking sites and it has referral-based incentive models for bringing users to their platforms, the ED said in a statement. “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 agency charged.
The ED alleged that the funds were credited to the bank accounts of various dummy entities and domestically transferred to other banks for layering, following which cross-border transactions were undertaken. “The said app and its website have not been authorised by the Reserve Bank of India to deal in forex trading. The conduct and operations of forex trading, not being conducted on a recognised stock exchange, is illegal, and also violates FEMA regulations,” said the agency.
The ED has also alleged that multiple accounts of different Indian banks were being shown to the investors or app users for collecting funds in the guise of facilitating forex trading. The collected money was simultaneously transferred to several “e-wallet accounts such as Neteller, Skrill or to bank accounts of dummy entities”.
A significant portion of the allegedly defrauded amount was used to buy cryptocurrencies/assets through Zanmai Labs Private Limited. “Zanmai Labs provided 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 Cayman Islands) leading to the transfer of Indian currency to overseas entities in the form of cryptocurrencies,” the ED alleged.
