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Indian authorities have seized more than $280 million tied to the Octafx Ponzi mastermind, following an international operation that culminated in the suspect’s arrest in Spain. The country’s Enforcement Directorate (ED) announced Friday that the seizure was conducted under India’s Prevention of Money Laundering Act (PMLA) after tracing funds allegedly connected to one of the largest cross-border investment scams in recent years.
According to the ED’s statement, the accused identified as Spanish national Pavel Prozorov orchestrated the OctaFX trading scam that defrauded thousands of Indian investors with promises of high returns through forex and crypto investments. The accused used complex offshore layering systems to conceal illicit proceeds and repatriate profits disguised as legitimate investments, said an ED spokesperson in the release.
The Octafx Ponzi mastermind is believed to have operated through multiple jurisdictions, laundering investor funds across Spain, Singapore, Dubai, Estonia, and the British Virgin Islands (BVI) using shell companies and digital asset transfers.
Indian investigators stated that the crackdown forms part of an ongoing transnational operation to recover assets linked to fraudulent online investment schemes. Earlier probes revealed that OctaFX facilitated the laundering of $96 million in less than a year by channeling money through fake import service contracts with Singapore-based fronts.
Among the seized assets are a luxury yacht, a villa in Spain, and several foreign bank accounts. Authorities said these were directly linked to Pavel Prozorov, the Octafx Ponzi mastermind, who allegedly generated over $90 million in profits by defrauding Indian citizens between July 2022 and April 2023.
“The company operated from 2019 to 2024, earning over ₹5,000 crore in illicit profits from Indian investors,” the ED noted in its report. According to India’s Prevention of Money Laundering Act (PMLA), the agency has powers to freeze assets suspected to be linked to proceeds of crime while cooperating with foreign enforcement agencies.
Local reports indicate that the Spanish National Police coordinated with the ED through Interpol to detain Prozorov in Madrid. The extradition process is now underway, with Indian officials requesting his transfer to face charges under Indian law.
The Octafx Ponzi mastermind allegedly built a sophisticated infrastructure to disguise fraudulent investment inflows as legitimate foreign trading activity. The ED’s probe revealed that OctaFX claimed to be a licensed forex and crypto trading platform but lacked authorization from the Reserve Bank of India (RBI) which is a violation of India’s Foreign Exchange Management Act (FEMA).
“The initial investors received small returns to build trust, as is typically seen in Ponzi schemes,” the ED report said. Investigators uncovered a distributed network spanning Estonia, Georgia, Cyprus, and Dubai, each performing specific roles from managing payment gateways to providing server support and laundering funds.
Entities in Singapore reportedly handled the transfer of illicit proceeds abroad under false trade documentation. A holding company in Cyprus acted as the formal operator of the Indian arm, while Dubai-based intermediaries allegedly controlled the ultimate flow of profits.
According to India’s Financial Intelligence Unit (FIU-IND), this pattern of fund movement through offshore entities matches recent trends in digital money laundering using layered crypto and forex transactions.
Authorities estimate that Indian investors lost over $211 million to OctaFX, with many deposits made through Unified Payments Interface (UPI) and local bank transfers routed via dummy Indian companies. These funds were subsequently moved abroad through a series of mule accounts, disguised as trade payments, and later reinvested into India as foreign direct investment (FDI) to evade scrutiny.
Such circular transactions exploit the regulatory gap between cross-border forex platforms and domestic payment systems, said Dr. Meera Nair, a financial crime analyst at the Centre for Economic Policy Research. The Octafx Ponzi mastermind exploited multiple jurisdictions, highlighting the need for unified oversight of digital financial flows.
The ED’s findings also implicate several overseas firms that provided digital infrastructure and marketing services to OctaFX, raising questions about third-party accountability in enabling financial crimes.
As Indian authorities continue coordination with foreign agencies, including Europol and Interpol, experts warn that similar Ponzi-style investment schemes could proliferate if not tightly regulated. “Global cooperation is essential to trace these networks,” said Anupam Sharma, cybersecurity advisor at India’s Ministry of Finance, in a recent interview. “Platforms like OctaFX leverage technology to outpace enforcement as it’s a cat-and-mouse game.”
The ED has reaffirmed its commitment to pursuing high-value economic offenders and recovering defrauded assets. In its September 15 update, the agency reported freezing over $3.2 billion in assets connected to money laundering and financial scams in collaboration with 290 enforcement bodies across 59 countries.
The crackdown on the Octafx Ponzi mastermind underscores India’s growing use of data analytics, international treaties, and crypto-tracing tools to uncover hidden assets and bring global fraudsters to justice.
For investors, the case serves as a warning against unlicensed platforms promising unrealistic returns. Regulatory experts urge individuals to verify investment services through the Reserve Bank of India’s authorized dealer list before engaging in online trading.
