Regulation
|3 min ReadIndia Freezes $271M in Crypto as OctaFX Probe Widens
Maya Chen
Senior Analyst
Published
Jan 16, 2026
Targets unlicensed forex scheme and offshore payment loops
India’s Directorate of Enforcement in Mumbai moved to choke off a cross-border trading web tied to digital assets and forex. On Oct. 17, the agency said it attached cryptocurrency worth about Rs. 2,385 crore ($271 million) under the Prevention of Money Laundering Act, 2002. The action follows the arrest in Spain of Pavel Prozorov, identified as a key figure behind operations linked to OctaFX, an unlicensed online forex platform under investigation for financial irregularities.
“ED initiated PMLA investigation on the basis of FIR registered by Shivaji Nagar PS, Pune, Maharashtra against several individuals for defrauding investors by falsely promising high returns through the OctaFX forex trading platform,” the agency said. According to findings, OctaFX drew roughly Rs. 1,875 crore from Indian investors between July 2022 and April 2023 and generated an estimated Rs. 800 crore in profits. That is a tremendous haul, and it raised red flags.
Shell firms, UPI rails and round-tripped funds
Investigators allege OctaFX presented itself as an online venue for currency, commodities and crypto trading without Reserve Bank of India permission. “The initial investors received small profits to build trust, as is generally seen in a typical Ponzi scheme,” the ED noted.
The agency said more than Rs. 5,000 crore moved offshore through layered networks and overseas entities. On the ground in India, the flows ran through domestic UPI and bank transfers routed via shell companies and unauthorized payment aggregators, disguising the money as software and R&D payments to firms abroad. Some of those funds later returned as foreign direct investment, classic round-tripping that regulators hate to see. Very clear. Very direct.
Seizures escalate as case goes to Special Court
Authorities now count Rs. 2,681 crore in attached assets tied to the probe, beyond the crypto alone. The list includes 19 properties and a luxury yacht in Spain. A prosecution complaint and a supplementary filing have been submitted to the Special Court under PMLA.
Market observers say the case exposes weak oversight around unlicensed platforms and points to the need for clearer rules that let compliant forex and crypto operators work transparently. Big enforcement, bigger lesson. India is sending a message: follow the law, or funds get frozen and ships get seized.
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