Pakistanis Lose Millions to Crypto Scam, Pakistan Issues Notice to Binance –

Investors from Pakistan have fallen victim to a massive cryptocurrency scam. The country's main law enforcement agency has issued a notice to crypto exchange Binance in connection with the scam that resulted in a loss of $100 million for Pakistanis, media reports revealed.

Scammers are luring Pakistanis to invest in cryptocurrency through Binance

Pakistan's Federal Investigation Agency ( FIA ) has uncovered a crypto investment scam that allegedly cost Pakistani citizens around 17.7 billion rupees (around $100 million). Imran Riaz, director of the FIA's cybercrime wing, said on Friday that the organizers had used cryptocurrencies. Quoted by local media, Riaz announced:

We launched an investigation after receiving complaints about a scam involving billions of rupees through nine online applications.

The scammers used mobile apps that offered Pakistani crypto investment opportunities and sent between $100 and $80,000, or an average of $2,000 per person. Investors were encouraged to register with Binance, the world's leading crypto exchange, and transfer the funds from the Binance wallet to accounts linked to the applications. On December 20, authorities were contacted by many users complaining that around a dozen apps suddenly stopped working.

“During the investigation, it was found that the fraudulent accounts of various applications, namely MCX, HFC, HTFOX, FXCOPY, OKMINI, BB001, AVG86C, BX66, 91fp, TASKTOK, were linked to Binance wallets,” officials explained. Each had an average of 5,000 customers. The FIA ​​​​notified Hamza Khan, identified as Binance's representative for Pakistan, and personally summoned him on January 10.

“The FIA ​​Cyber ​​Crime Sindh has issued an attendance order to Hamza Khan, General Manager/Growth Analyst at Binance Pakistan (Crypto Currency Exchange), to explain his position on linking fraudulent online mobile investment applications with Binance,” the FIA ​​said as quoted by the Express Tribune and other news agencies. “A relevant questionnaire was also sent to Binance Cayman Islands and Binance US headquarters to explain the same,” the agency added in a press release.

Authorities are keeping an eye on Pakistani crypto transactions

The FIA ​​claims to have identified 26 wallet addresses at Binance that were used to transfer the funds. “A letter has been written to Binance Holdings Limited to share the details of these blockchain wallet accounts and block them,” the agency said, adding it also has supporting documentation and information about the apps’ integration with the coin trading platform.

Noting that Binance is the “largest unregulated virtual wallet” in which Pakistanis have invested millions of dollars, the FIA ​​warns the FIA ​​that in case of non-compliance, its cybercrime department could recommend the State Bank of Pakistan ( SBP ) impose fines. It has now started closely monitoring the transactions made by Pakistanis on the stock exchange.

Police officers are also turning to the popular messaging app Telegram as members of the program have been added to various groups that spread signals about Bitcoin price fluctuations. The FIA ​​is issuing legal notices to social media influencers who promoted the apps and took steps to block all bank accounts linked to the scam.

In December, the Federal Investigation Agency froze over 1,000 bank accounts and cards used by crypto traders from Pakistan. According to an April 2018 SBP circular, buying and selling cryptocurrencies is still banned in the country. Despite the ban, a recent report revealed that Pakistanis have invested $20 billion in crypto assets. Calls for the government to regulate related transactions.

Do you expect Pakistan to further restrict crypto investments and trading after this fraud case? Let us know in the comments section below.

Lubomir Tassev

Lubomir Tassev is a tech-savvy journalist from Eastern Europe who likes Hitchens' quote: "Being a writer is what I am, not what I do." In addition to crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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