India Continues Crackdown on CFD Brokers: Raids Zara FX and Freezes Bank Accounts

The Indian financial crimes police have raided multiple locations of Zara FX (now known as Zarvista Capital Markets), a forex and contracts for differences (CFDs) broker, and frozen its bank accounts, which hold about INR 39 million (USD 445,000), for illegally operating as a forex trading platform in the country.

Has India Started to Crack Down on “Illegal” FX Platforms?

According to a press release by the Enforcement Directorate, which polices financial crimes in India, the authorities searched four Zara FX premises across multiple locations last Thursday and seized several mobile devices and a hard disk.

All the searched premises were located in Kerala, a southern state of India.

"We have no offices, subsidiaries, or operational presence in India,"
a Zarvista spokesperson said. "We do not market our services to Indian residents, nor do we conduct regulated business activities within the country."

The Enforcement Directorate alleged that Zara FX has been operating illegally in India by collecting deposits through mule accounts and promising high returns to investors.

“Preliminary investigation has revealed that the syndicate was operating through unregulated online trading platforms and collecting deposits via a network of mule accounts,” the press release by the Indian authority stated.

“Investors were lured with the promise of unusually high returns, and the collected funds were routed through multiple layers of bank and virtual accounts to obscure their origin. Part of the funds were allegedly diverted for speculative forex trading abroad, while the remaining amounts were siphoned off for personal gains.”

FinanceMagnates.com reached out to Zara FX but has not received any reply as of press time.

The actions against Zara FX came less than a month after Exness stopped onboarding new traders from India, one of its largest markets.

In fact, CFD brokers and prop firms are heavily investing in India due to the country’s potential. Recently, the CEO of prop firm The5ers revealed that India is its largest market.

Zara FX CEO Is Under Investigation

Apart from the raid and seizure, the Indian authorities also initiated an investigation against Jamsheer TV, CEO of Zara FX, and “others,” but did not name anyone else.

"While our CEO, Mr. Jamsheer, has been mentioned in the reports, his nationality is being wrongly used to imply that the Company operates in India," the Zarvista spokesperson added. "This assumption is entirely unfounded and ignores the reality of our operations and compliance framework."

Locally, the central bank of India heavily regulates forex trading, but there are no regulations for platforms operating from offshore. However, India also has strict currency controls, and the actions against Zara FX appear based on those breaches.

The Enforcement Directorate highlighted that Zara FX is “a Cyprus-registered forex trading platform.” Although the broker has a physical presence in Cyprus, it is not regulated on the island. Instead, it offers its CFDs trading services under two offshore licences – one from Mauritius and the other from Comoros.

According to the Zarvista website, the Cyprus entity “acts as a customer support service provider and payment agent of the group.”

"The Company is not a Cyprus-registered forex platform, and our Cyprus office operates strictly as a lawful administrative support center — handling accounting, finance, compliance coordination, and management oversight," the spokesperson of the company continued. "No client onboarding, transaction processing, marketing, or sales are conducted from Cyprus. The suggestion that our Cyprus operations have any involvement in the alleged activities is without any factual basis."

"The ongoing investigation is a matter we take seriously. Both the Company and our CEO will cooperate fully with the relevant authorities and are prepared to defend themselves vigorously against allegations that are entirely baseless and unsupported by evidence."

Last year, Zara FX was rebranded to Zarvista Capital Markets, which, according to the company, was a decision to align with its global objectives. Interestingly, the rebranding came only months after the broker closed its Series A funding round, raising $2 million.

Meanwhile, Zara FX is not the only forex trading platform under the Indian authorities' scrutiny. Earlier, the Enforcement Directorate took action against the Indian unit of Octa FX for similar allegations. However, the scale of Octa FX’s operations was much bigger.

Octa FX generated around $93.4 million from its Indian operations over nine months, which the Indian authorities classified as “proceeds of crime.” The Enforcement Directorate has also seized and attached assets worth $34.5 million linked to Octa FX, including 19 properties in Spain owned by Pavel Prozorov, described as “the mastermind behind the platform Octa FX.”

"We would like to point out that the global broker Octa is in no way affiliated with Mr. Pavel Prozorov," an Octa representative said. "None of Octa's current management is facing any legal issues. The company has no relation to any properties seized by the Spanish authorities and has not received any notifications from local law enforcement."