Pakistan to Investigate Binance for multi-million dollar crypto scam

The Federal Investigation Agency (FIA) in Pakistan has reportedly filed a formal report to the giant crypto exchange Binance. The FIA filed the report as a measure to help identify the connections surrounding a multi-million dollar crypto scam that occurred in the region. 

The Pakistan government kicked off a criminal investigation after several complaints were lodged against the ongoing scam. The scam involved tricking and misleading traders and investors to send funds from their Binance wallets to unidentified third-party crypto wallets.

According to several reports from local coverage, the FIA has filed an order of attendance to Binance via its Cyber Crime Wing. The order was directed to Hamza Khan, Binance Pakistan’s general manager. Hamza was charged to help point out Binance’s connection to the shady online investment mobile applications.

An applicable questionnaire was also sent to Binance US and the exchange’s Headquarters in the Cayman Islands. The questionnaire is designed such that Binance will be able to give a clear explanation about what happened. 

Details of the Scam

From the data made available by FIA, the online investment frauds in Pakistan were executed through Binance. The victims were asked to register on the Binance exchange and send funds to an unknown third-party wallet. The victims excitedly transferred the funds hoping they would earn unrealistic returns promised by the investment frauds. 

The fraudulent schemes generally benefit previous clients at the cost of new clients and eventually take off after making considerable gains. Usually, these investment scams cart away funds worth billions of rupees. 

Following up and evaluating the complaints put forward by citizens, FOA was able to identify 11 of these fraudulent mobile apps. However, the apps have stopped working since they successfully stole clients’ funds. 

The fraudulent mobile apps identified include HFC, MCX, BB001, TASKTOK, FXCOPY, AVG86C, HTFOX, 91fp, BX66, OKIMINI, and UG. 

The fraudsters did more than just instruct users to register on Binance and transfer funds to an unknown third-party wallet. They created a telegram account and added all users with the claim that they will be offering expert betting signals. 

On average, each of the eleven applications hosted approximately 5,000 customers. In total, the applications carted away with $100,000 million (Rs17.7 billion). According to the data shared by an FIA official, the victims invested between $100 and $80,000 in the scam. 

FIA’s Actions

So far, about twenty-six suspected blockchain wallet addresses where money was transferred have been identified. Consequently, a letter has been addressed to the crypto exchange Binance to provide information about the suspected wallet addresses. Not just that, the FIA has also employed Binance to debit block each of the wallets until the case is solved. You can use QR code for bitcoin transactions.

FIA has also asked Binance to make available integration mechanisms and official supporting documents employed by the fraudsters. This will help establish the necessary connections the fraudsters made with Binance’s services. 

Meanwhile, the FIA has promptly blocked the bank accounts of suspects linked to the fraudulent mobile applications. The FIA’s Cyber Crime Wing has also established that the agency is ready to dish out penalties on Binance in case of non-compliance. The Cyber Crime Wing claimed the penalties will be justified and executed via the State Bank of Pakistan. 

So far, Binance has remained quiet on the issue and even refused to make any comment based on  Cointelegraph’s request. 

Pakistan’s View of Crypto 

The Pakistan government is set and ready to protect its citizens from fraudulent dangers lurking in the crypto sphere. Nasir Hayat Magoon, the president of FPCCI (Federation of Pakistan Chambers of Commerce and Industry) disclosed that total worth of $20 billion of crypto assets is owned by Pakistani citizens. 

Nasir Hayat Magoon ascertained that the monetary value of crypto assets owned by Pakistani citizens is based on data published by the chamber. 

Chainalysis Global Crypto Adoption Index also supports the claim. Just last year, the catalog showed that Pakistan holds the third position in terms of index score. 

That is a lot of investment to protect and possibly the Pakistan government will issue stringent crypto regulations. This will help save investors from such scams but might limit the growth of crypto in the region. 


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