In Pakistan, investors have fallen prey to a huge fraud that uses cryptocurrency. The country’s main law enforcement agency has issued a notice to crypto exchange Binance in relation to the scam which resulted in the loss of $100 million dollars for Pakistanis, media reports revealed.
Pakistanis lured by fraudsters to invest in cryptocurrency through Binance
Pakistan’s Federal Investigation Agency (FIA) has uncovered a crypto investment scam that has allegedly cost Pakistani citizens some 17.7 billion rupees (around $100 million). Imran Riaz from the FIA cybercrime wing provided more details. Riaz was quoted by local media as saying:
After receiving reports about frauds involving millions of rupees, we launched an investigation using nine online apps.
They used mobile apps to offer Pakistanis cryptocurrency investment opportunities. People sent $100-$80,000 or $2,000 each, and the fraudsters made use of these funds. Investors were urged to register at Binance, the world’s leading crypto exchange, and transfer the money from the Binance wallet to accounts linked to the applications. Numerous users reported that several apps were suddenly unresponsive on December 20.
“During the inquiry, it was found that the fraudulent accounts of different applications, namely, MCX, HFC, HTFOX, FXCOPY, OKMINI, BB001, AVG86C, BX66, 91fp, TASKTOK, were linked with Binance wallets,” officials detailed. They had on average 5,000 customers. The FIA has issued a notice to Hamza Khan, identified as Binance’s representative for Pakistan, and summoned him to appear in person on Jan. 10.
“The FIA Cyber Crime Sindh has issued order of attendance to Hamza Khan, General Manager/ Growth Analyst at Binance Pakistan (Crypto Currency Exchange) to explain his position on the linkage of fraudulent online investment mobile applications with Binance,” the FIA said, quoted by the Express Tribune and other news outlets. “A relevant questionnaire has also been sent to Binance Headquarters Cayman Islands and Binance US to explain the same,” the agency added in a press release.
Officials to Pay Close Attention To Pakistani Crypto Transactions
According to the FIA, 26 Binance wallet addresses were used for money transfers. “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,” the agency stated, adding it had also requested supporting documentation and information about the apps’ integration with the coin trading platform.
Noting that Binance is the “largest unregulated virtual currency exchange” where Pakistanis have invested millions of dollars, the FIA warns that in case of non-compliance, its cybercrime unit could recommend the State Bank of Pakistan (SBP) impose financial penalties. The FIA has begun to monitor all transactions by Pakistanis using the exchange.
Telegram is also being contacted by law enforcement officers. Members of the scam were included in various groups that spread signals about the bitcoin price movements. The FIA has sent legal notices and taken steps to ban all accounts associated with the scam to influencers on social media.
Over 1,000 cards and bank accounts were frozen by the Federal Investigation Agency in December 2018 by cryptocurrency traders hailing from Pakistan. A circular by the SBP issued in April 2018 stated that the country still prohibits the sale and purchase of cryptocurrency. A recent report showed that the country has invested more than $20 billion in crypto assets despite this ban. The government has been receiving calls to regulate these transactions.
What do you think Pakistan will do to restrict cryptocurrency investments and trades after this case of fraud? Please comment below.
Images CreditsShutterstock. Pixabay. Wiki Commons
DisclaimerThis article serves informational purposes. This is not an invitation to purchase or sell directly, nor a suggestion or endorsement of products, services or companies. Bitcoin.com doesn’t offer investment, tax or legal advice. This article does not contain any information, products, or advice that can be used to cause or alleged result in any kind of damage.