ED Seizes OctaFX's Bank Accounts For A Suspected Unlawful Forex Trading Scheme

On September 29, the Directorate of Enforcement (ED) said Thursday that it had frozen the account balances of OctaFX India Private Ltd and linked companies worth Rs 21.14 crore in a case involving a breach of FEMA norms.

Previously, the ED conducted searches at several OctaFX India Private Ltd and linked businesses in the matter of Illegal Online Forex Trading via International Brokers, namely the OctaFX Trading App and website www.octafx.com, in accordance with FEMA rules.

According to the ED, the FEMA investigation discovered that the aforementioned online trading app and website are operating in India in conjunction with the India-based firm OctaFx India Pvt Ltd.

This forex trading platform is heavily marketed on social networking sites and uses referral-based incentive structures to acquire customers for its platforms. It has been discovered that monies are gathered from users and funneled via fake organizations, typically through UPI or local bank transactions.

These monies are deposited in the bank accounts of numerous fake businesses and moved domestically to other banks for the aim of layering, with further cross-border transactions.

Additional research has uncovered a link between foreign online forex trading firms and their Indian partners or agents. The aforementioned app (OCTAFX) and its website are not approved by the RBI to conduct Forex trading. Forex trading is prohibited and also violates FEMA rules.

During the inquiry, it was discovered that several accounts from various Indian banks were being shown to investors and users on the OctaFX trading app (www.octafx.com) for the purpose of collecting cash while ostensibly allowing forex trading.

After scamming these investors and users, the collected cash was moved to several e-wallet accounts such as Neteller, Skrill, or fake entity bank accounts at the same time. Furthermore, a significant chunk of the fraudulent sum on this trading app was utilized to acquire cryptocurrencies and other assets via Zanmai Labs Pvt. Ltd.

Zanmai Labs is offering banking channels and a bridge for INR deposits to Wazirx wallets, which were then moved to Binance Exchange (a cryptocurrency exchange situated in the Cayman Islands), resulting in the transfer of Indian cash to foreign companies in the form of cryptocurrencies. “A further inquiry is underway,” the ED stated in a statement. (ANI)

What exactly is FEMA？

The Foreign Exchange Management Act, 1999 (FEMA) is an Act passed by the Indian Parliament. It was enacted in Parliament on December 29, 1999, to replace the Foreign Exchange Regulation Act. FEMA opened the path for the passage of the Money Laundering Prevention Act of 2002, which went into effect on July 1, 2005.

The primary goal of the Foreign Exchange Management Act (FEMA) was to improve the efficiency of international payments and commerce for India. Its other purpose was to promote the steady growth and preservation of India's forex market. It lays down the rules and regulations for doing business in foreign currency in India.

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