Blockchain

Pakistan investigates Binance’s multi-million dollar crypto scam

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According to reports, Pakistan’s Federal Bureau of Investigation (FIA) has issued an official notice to the cryptocurrency exchange Binance to find out links to millions of cryptocurrency scams in the region.

The Pakistani government began a criminal investigation after receiving a large number of complaints against an ongoing scam that involved misleading investors to send funds from the Binance wallet to an unknown third-party wallet. according to For local reports, the cybercrime department of the FIA ​​has release An order from Hamza Khan, General Manager of Binance Pakistan, to determine the link between the exchange and the “fraudulent online investment mobile application”.

“Relevant questionnaires have also been sent to Binance Cayman Islands headquarters and Binance USA to explain the same situation,” the notice read. Investment fraud in Pakistan is carried out by requiring users to register on Binance and transfer funds to third-party wallets under the pretext of unrealistic returns. According to the FIA’s notice:

“These plans benefit old customers at the expense of new customers and eventually disappear after they have acquired a substantial capital base worth billions of rupees.”

Based on complaints filed by citizens, Pakistani agencies have identified at least 11 fraudulent mobile applications that suddenly stopped working after successfully stealing user funds. The applications recognized by FIA are MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK and 91fp.

In addition to guiding users to register on Binance to transfer funds, fraudsters also add victims to Telegram groups to provide “expert betting signals.” Each application hosts approximately 5,000 customers on average. The notice added:

“At least 26 suspicious blockchain wallet addresses (Binance wallet addresses) have been identified, among which fraudulent amounts may have been transferred. A letter has been written to Binance Holdings Co., Ltd. to provide detailed information and borrowing of these blockchain wallet accounts. Remember to freeze them.”

Binance was also asked to provide detailed information, including official supporting documents and integration mechanisms for the API used by fraudsters to connect to Binance services. Although the FIA ​​proactively blocked the bank account associated with the suspicious application, the notice warned:

“If the regulations are not followed, the FIA ​​cybercrime will have reason to propose financial penalties to Binance through the National Bank of Pakistan.”

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

related: The head of the local association stated that Pakistanis own $20B of encrypted assets

In December 2021, Nasir Hayat Magoon, chairman of the Pakistan Federation of Industry and Commerce (FPCCI), revealed that the total value of crypto assets held by Pakistani citizens was US$20 billion.

As Cointelegraph reported, the FPCCI chairman confirmed these figures based on a research paper published by the Chamber of Commerce. The 2021 Chainalysis Global Encryption Adoption Index ranking supports this statement Pakistan ranks third in index score Behind Vietnam and India.