The Pakistan Federal Investigation Agency (FIA) reportedly issued a formal notice to crypto exchange Binance in an effort to identify links around a multi-billion dollar crypto scam in the region.
The government of Pakistan launched a criminal investigation after receiving numerous complaints against an ongoing scam involving deceptive investors to send funds from Binance wallets to unknown third-party wallets. According to local coverage, the FIA’s CyberCrime Wing has issued an assistance order to Binance Pakistan CEO Hamza Khan to identify the exchange’s link to “fraudulent online investment mobile apps.”
KARACHI: The Federal Investigation Agency (FIA) detected a Rs 100 billion online fraud using a cryptocurrency and issued a notice to the local Binance representative. @cz_binance @binance @BinanceHelpDesk @BinanceUS pic.twitter.com/3oukwzmDqh
– Innocent Pashteen✌ (@FighterDawar) January 7, 2022
“A relevant questionnaire was also sent to Binance headquarters in the Cayman Islands and Binance US to explain the same,” the notice reads. Investment scams in Pakistan were carried out by asking users to register with Binance and transfer funds to third-party wallets under the guise of unrealistic returns. According to the FIA notice:
“These schemes benefit old clients at the expense of new ones and eventually disappear when they have built up a substantial capital base worth billions of rupees.”
Based on complaints raised by citizens, the Pakistani agency identified at least 11 fraudulent mobile apps that suddenly stopped working after successfully stealing user funds. The applications identified by the FIA are MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK and 91fp.
In addition to instructing users to sign up with Binance to transfer the funds, the scammers added the victims to a Telegram group for providing “expert betting signals.” Each application hosted around 5,000 clients on average. The notice added:
“At least 26 suspicious blockchain wallet addresses (Binance wallet address) have been identified where a fraudulent amount may have been transferred. A letter has been written to Binance Holdings Limited to provide the details of these blockchain wallet accounts, as well as to block them with debit. “
Details have also been requested from Binance, including official supporting documents and the API integration mechanism that scammers used to connect to Binance services. While the FIA has proactively blocked bank accounts that were linked to the suspicious apps, the advisory warned:
“In the event of non-compliance, the FIA cybercrime will be justified in recommending financial sanctions to Binance through the State Bank of Pakistan.”
Binance has yet to respond to Cointelegraph’s request for comment.
Related: Pakistanis Have $ 20 Billion In Crypto Assets, Says Local Association Head
In December 2021, the President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Nasir Hayat Magoon revealed that Pakistani citizens have a combined crypto asset value of $ 20 billion.
As Cointelegraph reported, the FPCCI president confirmed the figures based on an investigative article published by the chamber. Backing up the claim, the Chainalysis Global Crypto Adoption Index 2021 ranked Pakistan the third highest in terms of index score behind Vietnam and India.