‘Came across an ad by a famous actor…’: Zerodha’s Nithin Kamath warns celebrities endorsing illegal apps

Zerodha co-founder Nithin Kamath, in a post on X, raised concerns about top actors promoting unauthorized and unregulated platforms. Kamath said he came across an ad featuring a well-known star who probably had no idea about the legal status of the platform he was promoting.

Kamath, in his post, referred to Octafx, an online forex trading app that got the actors who endorsed it in trouble. Television actors Karan Wahi and Krystle D’Souza are being questioned for their endorsement of OctaFx.
Officials familiar with the development told a news agency that the actors’ statements were being recorded to “promote” the platform.

The statements are recorded in accordance with the Money Laundering Prevention Act.

This move came after the law enforcement agency conducted search operations under the Prevention of Money Laundering Act (PMLA), 2002 at various locations in Mumbai, Chennai, Kolkata and Delhi on June 18 as part of an ongoing investigation against the OctaFx trading app and website www.octafx.com.

Officials said that during the search operations, bank balances amounting to Rs 27 million were frozen and various incriminating documents and digital devices were found and seized by the ED.

ED initiated the investigation based on an FIR registered by Shivaji Nagar police station in Pune against several persons who were accused of offering false promises of high returns and cheating people under the pretext of trading forex through the platform.

An investigation by the ED revealed that OctaFx’s online trading app and website are operated in India in association with the India-based company OctaFx India Private Limited. According to the ED, the app (OCTAFX) and its website are not authorized by the RBI for forex trading.

“This forex trading platform is widely promoted on social networking sites and follows referral-based incentive models to attract users to their platforms,” ED said in a statement.

“On investigation, it was found that investors/users were shown multiple accounts of various Indian banks on OctaFx trading app/www.octafx.com to collect funds under the pretext of facilitating forex trading. It was also found that OctaFx manipulated trading activities and information displayed on its platform, which ultimately resulted in net loss to the traders. The said accumulated funds were transferred to multiple e-wallet accounts or bank accounts of bogus companies after defrauding these investors/users,” ED added.

“In this way, OctaFx India Pvt Ltd, OctaFx and their entities defrauded investors under the guise of Forex trading and thereby earned profits of over Rs 500 crore in the Indian region.”

Some of these funds were channeled through a network of complex transactions using shell companies and transferred to affiliated companies abroad under the guise of fake freight services and service imports, the investigating authority said.

The searches revealed a network of auditors and experts who issued fake transfer certificates and facilitated the provision of bank accounts and companies to hold such funds, the investigating authority found.
ED’s investigation also revealed that the entire process of presenting the account numbers of bogus companies, managing the funds collected in these accounts and diverting them “is managed and carried out by owners of OctaFx Group companies based in Spain, Russia, Georgia and Dubai.”