Mumbai, July 26, 2024 – In a significant crackdown on illegal forex trading activities, the Enforcement Directorate (ED) has conducted a series of raids on multiple locations across the country. These operations targeted prominent forex trading platforms accused of violating the Foreign Exchange Management Act (FEMA) and engaging in money laundering activities.
Massive Seizure and Freezing of Assets
During the raids, which spanned several cities including Mumbai, Surat, and Pune, the Enforcement Directorate seized assets worth over ₹5 crore, including cash, jewellery, and digital devices. Additionally, bank accounts and fixed deposits amounting to ₹21.14 crore were frozen, significantly impacting the operations of the implicated entities.
One of the primary targets of the operation was OctaFX, a well-known online forex trading platform. Investigations revealed that OctaFX had been operating in India without authorization from the Reserve Bank of India (RBI) and had channeled funds collected from users through a network of dummy entities and cross-border transactions. The platform, heavily promoted on social media, used referral-based incentive models to attract users, who were then defrauded of substantial amounts of money.
Hawala and Crypto Transactions Under Scrutiny
The ED’s probe uncovered that funds to the tune of ₹150 crore had been transacted through hawala channels for illegal forex trading abroad. The funds, collected mainly via UPI and local bank transfers, were transferred to multiple e-wallets and bank accounts of dummy entities. These transactions were layered to obscure their origins, making it difficult for authorities to trace the money.
In addition to traditional banking channels, a significant portion of the defrauded funds was used to purchase cryptocurrencies. These cryptocurrencies were then transferred to overseas entities, particularly through platforms like Wazirx and Binance. This method of converting and transferring funds to offshore accounts added another layer of complexity to the financial trail.
Raids in Surat and the Role of Ojasvi Foundation
The ED also conducted raids at 10 locations in Surat, targeting the Ojasvi Foundation and related entities. The foundation had been involved in speculative forex trading on a platform based in Dubai named Winsor Fx. The foundation lured over 8,500 individuals into investing in their forex trading schemes under the guise of multi-level marketing, promising high returns.
The raids resulted in the seizure of ₹1.33 crore in cash, foreign currencies worth over ₹3 lakh, and documents evidencing illegal forex transactions worth more than 8 lakh USDT (approximately ₹6.7 crore). The ED’s findings pointed to a sophisticated operation where funds were moved through hawala channels and digital currencies, complicating the tracking process.
Legal and Regulatory Implications
These raids underscore the stringent measures being implemented by Indian authorities to curb illegal forex trading and money laundering. The operations are part of a broader strategy to enforce compliance with FEMA and other financial regulations. By freezing assets and seizing documents, the ED aims to dismantle the networks facilitating these illicit activities.
The involvement of cryptocurrencies in money laundering schemes also highlights the need for stricter regulatory oversight in the digital currency domain. The ED’s actions serve as a warning to other forex trading platforms operating without proper authorization, emphasizing that violations of financial regulations will be met with severe consequences.
Ongoing Investigations
The ED has stated that investigations are ongoing, and further actions will be taken based on the evidence collected during the raids. The agency is also exploring the international links of these trading platforms and their nexus with foreign brokers and entities.
As the probe continues, more details are expected to emerge, shedding light on the intricate operations of illegal forex trading networks and their impact on the Indian financial system.
In conclusion, the ED’s recent raids mark a significant step towards cleaning up the forex trading sector and ensuring compliance with financial laws. The crackdown on platforms like OctaFX and entities like the Ojasvi Foundation reflects a robust regulatory approach aimed at protecting investors and maintaining the integrity of India’s financial markets.
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