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
in
an
effort
to
identify
links
around
a
multi-million
crypto
scam
in
the
region. 

The
government
of
Pakistan
started
a
criminal
investigation
after
receiving
numerous
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
Cyber
Crime
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
asking
users
to
register
on
Binance
and
transfer
funds
to
third-party
wallets
under
the
pretext
of
unrealistic
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
identified
at
least
11
fraudulent
mobile
apps
that
suddenly
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.

In
addition
to
directing
users
to
sign
up
on
Binance
to
transfer
the
funds,
the
fraudsters
added
the
victims
on
a
Telegram
group
for
providing
“expert
betting
signals.”
Each
application
hosted
around
5,000
customers
on
average.
The
notice
added:

“At
least
26
suspect
blockchain
wallet
addresses
(Binance
wallet
address)
have
been
identified
where
fraudulent
amount
may
have
been
transferred.
A
letter
has
been
written
to
Binance
Holdings
Limited
to
give
the
details
of
these
blockchain
wallet
accounts
as
well
as
to
debit
block
them.”

Binance
has
also
been
asked
for
details
including
official
supporting
documents
and
integration
mechanism
of
the
APIs
that
were
used
by
the
fraudsters
to
connect
with
Binance’s
services.
While
the
FIA
has
proactively
blocked
the
bank
accounts
that
were
linked
to
the
suspicious
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.”

Binance
has
not
yet
responded
to
Cointelegraph’s
request
for
comment.


Related:




Pakistanis
have
$20B
in
crypto
assets,
says
head
of
local
association

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

As
Cointelegraph
reported,
the
FPCCI
president
confirmed
the
numbers
based
on
a
research
paper
released
by
the
chamber.
Supporting
the
claim,
the
2021
Chainalysis
Global
Crypto
Adoption
Index

ranked
Pakistan
the
third
highest

in
terms
of
index
score
behind
Vietnam
and
India.

read original article here