Pakistan to investigate Binance for multi-million dollar crypto scam

The Federal agency of Pakistan started a criminal investigation after getting various complaints against an ongoing scam that involved misleading investors into sending funds from Binance wallets to unknown third-party wallets.

Pakistan to investigate Binance for multi-million dollar crypto scam

Pakistan's Federal Investigation Agency(FIA) reportedly issued a formal notice to crypto exchange Binance ub an effort to identify links around a multi-million crypto scam in the region.

The Government of Pakistan started a criminal investigation after receiving various complaints against an ongoing scam that involved misleading investors into sending funds from Binance wallets to unknown third-party wallets. According to local coverage. the Fia's cybercrime wing has issued an order of attendance to Binance Pakistan's general manager Hamza Khan to identify the exchange's link to "fraudulent online investment mobile applications."

"A relevant questionnaire has also been sent to Binance Headquarters Cayman islands and Binance US to explain the same." read the notice. The investment frauds in Pakistan were carried out by requesting Users to register on Binance and transfer funds to their party wallets under the appearance of unreasonable returns. According to the FIA notice. 

“These schemes benefit old clients at the cost of new clients and ultimately disappear when they have made substantial capital base worth billions of rupees.”

Based on the complaints raised by citizens, the Pakistani agency recognized something like 11 fraudulent mobile apps that unexpectedly stopped working after successfully stealing the user's funds the apps identified by FIA are MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK, and 91fp

Additionally, to direct users to register on Binance to transfer the funds, the fraudsters included the victims on a Telegram group for providing "expert 0betting signals," Each application hosted approx 5,000 customers on average. The notice added.

At least 26 suspect blockchain wallet addresses(Binance wallet address) have been identified where fraudulent amounts may have been moved. A letter has been written to Binance Holding Limited to give the information of these blockchain wallet accounts as well to debit block them."

Binance has been requested for details including supporting documents and integration mechanism of the APIs that were used by the fraudsters to associate with Binance services. While the FIA has proactively blocked the bank account that was linked to the apps, the notice warned:

“In case of non-compliance, FIA Cyber Crime will be justified to recommend financial penalties on Binance through the State Bank of Pakistan.”

In December 2021, the president of the Federation of Pakistan Chambers of Commerce and Industry(FPCCI) Nasir Hayat Magoon revealed that Pakistani residents hold a joined crypto assets value worth $20 billion.

The FPCCI president confirmed the numbers based on a research paper delivered by the camber. Supporting the case, the 2021 Chainalysis Global Crypto Adoption index ranked Pakistan the third highest in terms of index score behind Vietnam and India.

Read: Apple co-founder Steve Wozniak loses Bitcoin scam case against YouTube

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