OctaFX’s Controlling Shareholder Arrested | Is This Broker Hiding a Massive Scam?

India‘s financial authorities have taken strong action against global trading platform OctaFX after uncovering what they describe as one of the largest unauthorised forex scams in the country’s history. The Directorate of Enforcement (ED), part of the Ministry of Finance, has frozen assets worth ₹2,385 crore (USD 318 million) in cryptocurrencies linked to OctaFX and its controlling shareholder, Pavel Prozorov.

The move follows a major investigation into allegations that OctaFX defrauded thousands of Indian investors by promising high returns through illegal foreign exchange trading. According to the ED, the companys operations involved multiple layers of deception, complex fund transfers, and an international network designed to hide illicit profits.

The investigation has also led to the arrest of Pavel Prozorov in Spain. Authorities there have confirmed his detention, describing him as a key figure in the case. So far, Indian officials have attached assets worth more than ₹2,681 crore (USD 358 million), including 19 properties and a luxury yacht owned by Prozorov.

A Deepening Financial Scandal

The EDs investigation revealed that OctaFX lured Indian investors by presenting itself as a legitimate online platform for trading in forex, commodities, and cryptocurrencies. However, the firm operated without authorisation from the Reserve Bank of India (RBI).

Between July 2022 and April 2023, OctaFX is believed to have defrauded investors of around ₹1,875 crore (USD 250 million), while generating profits estimated at ₹800 crore (USD 107 million). Over a longer period, from 2019 to 2024, its total earnings from India are approximately ₹5,000 crore (USD 668 million), most of which were sent abroad through hidden financial routes.

Officials say the companys methods resembled a Ponzi-style scheme. Early investors received small returns to gain their trust, which encouraged them to invest more. Once funds were collected, they were transferred through fake companies and offshore accounts, making them difficult to trace.

A Global Web of Entities

According to the ED, OctaFXs structure was deliberately designed to avoid regulatory oversight. Marketing was handled by companies registered in the British Virgin Islands (BVI), while servers and back-office operations were based in Spain.

Payment gateways were managed through Estonian entities, and technical support came from teams in Georgia. A Cyprus-based holding company supervised Indian operations, while Russian nationals located in Dubai coordinated business in South Asia. Singapore-based companies helped move funds overseas by disguising them as payments for fake software and research services.

This global web allowed OctaFX to appear legitimate while quietly moving large amounts of money across borders. The companys operations also highlight how offshore structures can be used to exploit weak regulatory links between jurisdictions.

Manipulated Trades and False Data

Investigators allege that OctaFX manipulated trading results to ensure that most clients lost money. Evidence reportedly shows the use of altered candlestick charts and intentional order slippage, creating false market movements that favoured the broker.

To attract new customers, OctaFX ran an Introducing Broker (IB) scheme, offering generous commissions to people and companies that referred clients. This helped the platform grow quickly but also made it easier to spread its reach without formal marketing oversight.

Indian staff members based in Russia and Spain provided customer support, guiding clients through deposits and withdrawals. However, deposits made through local bank transfers and UPI were sent to dummy companies and personal accounts, often under the pretext of e-commerce payments.

Funds were layered through multiple accounts to hide their origin, with the help of unauthorised payment processors who supplied fake merchant identities to make the transactions appear genuine.

How the Money Was Moved

The ED says the collected funds were sent abroad as payments for imported software or research services, though no real products or services existed. The money went to firms controlled by Prozorov in Spain, Estonia, Russia, Hong Kong, Singapore, the UAE, and the UK.

Some of this money was later sent back to India as foreign investment, giving it a legal appearance. The rest was reportedly spent on luxury items, property purchases, and company expansion. A portion was also converted into cryptocurrencies and stored in digital wallets under Prozorovs control.

Legal Action Underway

The ED has filed both a Prosecution Complaint and a Supplementary Complaint against OctaFX and 54 other people and entities under India‘s Prevention of Money Laundering Act (PMLA). The Special Court has officially taken up the case, marking the start of what could become one of India’s most important financial trials in recent years.

Meanwhile, overseas regulators are also taking notice. The Cyprus Securities and Exchange Commission (CySEC), which oversees Octa Markets Cyprus Ltd, suspended Pavel Prozorov‘s voting rights earlier this year. CySEC cited concerns that his influence was harmful to the firm’s proper management and governance.

In June 2025, Singaporean authorities blocked access to OctaFXs website due to concerns about unlicensed forex activity.

Regulatory Warnings Mount

OctaFXs problems are not limited to India. The company has been flagged by regulators in Malaysia as well.

Read this article here for more details: https://www.wikifx.com/en/newsdetail/202506055744913536.html

The Securities Commission Malaysia (SC) placed it on its Investor Alert List, stating that it was offering trading services without a valid licence. The Bank Negara Malaysia (BNM) also included OctaFX on its Financial Consumer Alert List, a warning issued to protect the public from unauthorised financial operators.

These alerts mean OctaFX is not officially permitted to operate in Malaysia and that clients trading through it are not protected under local law. Malaysian authorities have also warned of clone companies using OctaFXs name and branding to trick investors, a problem that has made it even harder for traders to know whom they are dealing with.

In August 2025, OctaFX restricted cryptocurrency deposits for Malaysian clients, halting new payments in Bitcoin (BTC) and Ethereum (ETH). While withdrawals remained available, many observers viewed this as a response to the rising scrutiny from regulators rather than a technical change.

Read the full story here: https://www.wikifx.com/en/newsdetail/202508212824886254.html

A Questionable Shift to Offshore Regulation

In October 2025, OctaFX announced that it had moved its operations to the Comoro Islands, claiming to hold a licence from the Mwali International Services Authority (MISA) under licence number T2023320. The firm described the change as a step towards “stronger compliance” and “added protection” for clients.

OctaFX Transitions to Comoro Islands Regulation Under Mwali International Services Authority

Global forex broker OctaFX has announced that it will now operate under a new regulatory framework in the Comoro Islands, claiming to hold an International Brokerage and Clearing House licence issued by the Mwali International Services Authority (MISA).

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However, experts quickly pointed out that MISAs authority is limited. The Central Bank of the Comoros has previously described MISA as a “fictitious structure,” stating that only institutions licensed directly by the central bank are legally recognised.

This means OctaFXs new licence may carry little real weight, offering no substantial oversight or investor protection. For many in the trading community, the move appears to be an attempt to escape tougher regulation in established markets such as Europe, India, and Malaysia.

Trader Complaints Around the World

Beyond official investigations, OctaFX has also faced a wave of customer complaints in several countries. Reports collected by WikiFX show that many users have struggled to withdraw their funds, especially after making profits.

Traders in India, Singapore, and Hong Kong have described delayed payments, blocked accounts, and unhelpful customer service. Several reported that their withdrawal requests were rejected without explanation, sometimes followed by account suspension.

Read more on these complaints here:

Trapped Capital: Complaints Exposing OctaFX’s Questionable Practices

Traders across Asia are sounding the alarm as OctaFX is accused of freezing accounts, blocking withdrawals, and leaving users helpless, raising urgent concerns that your money might not be safe.

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These complaints often share the same pattern: while clients are losing money, trading and withdrawals appear to work normally. Once they start to profit, problems begin. This behaviour has led many traders to believe the platform may be intentionally delaying or denying withdrawals to reduce payouts.

The lack of clear answers and repeated delays have caused growing frustration among users, who describe OctaFXs communication as slow, repetitive, and unhelpful. Many have warned other traders to stay away until the company resolves these issues and proves it can manage client funds responsibly.

The Illusion of Security

For years, OctaFX has presented itself as a trusted global broker, promoting its modern platform, low spreads, and fast execution speeds. Its website and marketing material project the image of a well-established company with strong global regulation.

View WikiFXs full review on OctaFX here: https://www.wikifx.com/en/dealer/8426481202.html

However, the growing list of regulatory warnings, blocked websites, and legal investigations tells a very different story. The firms operations across loosely regulated jurisdictions raise questions about how it manages client money and what protections traders really have.

While OctaFX continues to cite its CySEC licence in Cyprus as evidence of compliance, that authorisation applies only within Europe and does not cover its operations in India, Malaysia, or other markets where it remains unlicensed.

A Global Lesson for Traders

The OctaFX case is becoming a warning to retail traders worldwide. In an industry filled with online brokers promising easy profits, strong regulation is often the only real safeguard. Traders must understand that a brokers licence in one country does not automatically make it legitimate elsewhere.

Choosing an unregulated or offshore broker may offer attractive trading conditions but can also expose investors to serious risks, including the loss of funds and limited recourse if disputes arise.

Regulators have repeatedly reminded traders to check both the existence and location of a brokers licence before opening an account. Platforms registered under offshore jurisdictions often lack the financial guarantees and transparency required by top-tier regulators.

What Comes Next

With Pavel Prozorov under arrest and the EDs investigation still expanding, the future of OctaFX is uncertain. The company faces criminal cases in India, warnings in Malaysia, and growing distrust among traders across Asia and beyond.

Authorities are expected to continue tracing OctaFXs network of international accounts and partner companies in an effort to recover investor funds and identify other people involved in the scheme.

For now, the seizure of ₹2,385 crore in cryptocurrency assets marks a turning point. It shows that regulators are increasingly willing to pursue global online trading platforms that exploit cross-border loopholes and digital currencies to hide profits.

The OctaFX story highlights a broader challenge for financial authorities worldwide: keeping pace with rapidly evolving online markets that can shift their operations overnight. It also reminds investors of a simple truth. In trading, if something sounds too good to be true, it probably is.

WikiFX is Here to Protect You

At WikiFX, our mission is to empower investors with the knowledge and tools required to make safe, informed decisions. When selecting an overseas broker, we strongly advise exercising due diligence and, wherever possible, choosing one regulated by a reputable authority such as Australia‘s ASIC, the United Kingdom’s FCA, or other recognised regulators.

Should you fall victim to fraudulent activity, you must act without delay. We recommend reporting the matter to the police or consulting a qualified solicitor, as well as contacting your local consumer affairs office.

To further support investors, the WikiFX app delivers daily push notifications highlighting brokers identified as posing withdrawal risks. For timely updates and reliable protection, we encourage you to download the app.