The Federal Investigation Agency (FIA) of Pakistan said to have given a formal warning to Binance, a cryptocurrency exchange. In an effort to trace the origins of a multi-million dollar cryptocurrency scam in the country.
After receiving several complaints about an ongoing scam in which investors misled into transmitting funds from Binance wallets to unknown third-party wallets, the Pakistani government launched a criminal inquiry. According to local media reports, the FIA‘s Cyber Crime Wing has issued a summons to Binance Pakistan’s general manager Hamza Khan in order to determine the exchange’s connection to “fraudulent online investing mobile applications”.
Pakistani government uncovered at least 11 fraudulent mobile apps
“A relevant enquiry issued to Binance Headquarters Cayman Islands. As well as Binance US to clarify the same,” the note continued. Investment fraudsters in Pakistan enticed customers to register on Binance and transfer funds to third-party wallets under the promise of exaggerated earnings. The following is an excerpt, from the notice the FIA issued:
“These schemes enrich current clients at the expense of potential clients. And they gradually fade away once they have amassed a large financial base worth billions of rupees.”
Based on citizen complaints, the Pakistani government uncovered at least 11 fraudulent mobile apps. That abruptly stopped working after successfully receiving the user’s cash. The programmes spotted by FIA include MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK, and 91fp.
The scammers invited the victims to a Telegram channel. Where they would receive “expert betting signals”, as well as for instructions on how to send money using Binance. Each programme had about 5,000 participants on average. The alert added, “At least 26 questionable blockchain wallet addresses (Binance wallet addresses) where fraudulent money may have been transmitted have been detected”. A letter has been sent to Binance Holdings Limited. Asking the data of these blockchain wallet accounts as well as debit banning them.”
Pakistanis hold $20 billion in cryptocurrency
Additional information, such as formal supporting documentation and the API integration approach utilised by the fraudsters to access Binance’s services, has been requested from Binance. The FIA had previously frozen the bank accounts linked to the suspected apps. However, the alert issued a warning:
“In the event of non-compliance, the FIA Cyber Crime shall be justified in recommending financial sanctions against Binance via the State Bank of Pakistan.”
In December 2021, Nasir Hayat Magoon, the president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), revealed that Pakistanis hold $20 billion in cryptocurrency.
The FPCCI president, according to sources, acknowledged the figures, which were based on a chamber study paper. This assumption supported by the 2021 Chainalysis Global Crypto Adoption Index. Which places Pakistan third behind Vietnam and India in terms of index score.