OctaFX India pays ₹32 lakh to settle Sebi forex trading violation case

Order came after the applicant proposed to settle the pending proceeding without "admitting or denying the findings of fact and conclusions of law", and filed a settlement application in Aug last year

Forex trading platform OctaFX India on Friday settled with markets regulator Sebi a case related to alleged violation of trading norms on payment of Rs 32 lakh towards settlement amount.

Besides, OctaFX India Pvt Ltd (now known as Taunga Pvt Ltd) will not be eligible to apply for any registration with Sebi for five years and will be debarred from buying/ trading in the securities market (directly or indirectly) for a period of 1 year, according to Sebi order.

Also, the applicant (Taunga Pvt Ltd) will surrender stock broker registration.

The order came after the applicant proposed to settle the pending proceeding without "admitting or denying the findings of fact and conclusions of law", and filed a settlement application in August last year.

"It is hereby ordered that the instant proceedings initiated against the applicant vide post enquiry show cause notice dated May 9, 2024 are disposed of," Sebi said in the settlement order.

The Securities and Exchange Board of India (Sebi) advised BSE to examine the matter of OctaFX, which was allegedly carrying out illegal activities by providing an unregulated online trading platform for trading in forex derivatives.

Pursuant to that, BSE submitted its report to the regulator on March 14, 2022.

The markets watchdog conducted the examination and it was observed that OctaFX India Pvt Ltd, a Sebi-registered stock broker, and its directors were associated with unauthorised forex trading platform Octafx.com/OctaFX Trading App.

Sebi also observed that OctaFX suppressed and denied its association with unauthorised forex trading platform and thereby, indirectly promoted the trading platform and that the company had failed to inform either Sebi or BSE that Enforcement Directorate had conducted searches at several of its premises.

In July, the Enforcement Directorate (ED) had attached assets of OctaFX worth more than Rs 131 crore under the anti-money laundering law in a case against a "fraud" forex-trading platform that has allegedly cheated numerous investors.

"These assets belong to Pavel Prozorov, the mastermind behind OctaFX," the federal probe agency said.

ED investigation revealed that OctaFX laundered funds by collecting investor money through mule accounts in the names of fake e-commerce firms.

The platform is suspected to have generated "proceeds of crime" amounting to Rs 800 crore from its operations in India in just nine months.