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KARACHI: The Federal Investigation Agency’s (FIA) Cyber Crime Wing on Friday issued a notice to Binance, a popular cryptocurrency exchange, while investigating a multi-million dollar scam.
According to a press release, the FIA’s Cyber Crime Wing (Sindh) issued notice to Hamza Khan – the general manager/growth analyst at Binance Pakistan – to explain his position on the company’s linkage to “fraudulent online investment mobile applications”.
“A relevant questionnaire has also been sent to the Binance Headquarters in Cayman Islands and Binance US to explain the same,” the statement added.
The FIA said many online investment frauds were operating in Pakistan on the pattern of Ponzi schemes where investors were promised high returns if they brought in more clients. “These schemes benefit old clients at the cost of new clients and ultimately disappear when they have made a substantial capital base worth billions of rupees,” it added.
The FIA further added that on Dec 20, 2021, people from all over the country contacted the agency and said that at least 11 mobile apps had stopped working and had “defrauded people of billions of rupees”. These apps were identified as MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK and 91fp.
“The modus operandi of these applications was to ask people for registration at Binance Crypto Exchange (Binance Holdings Limited) […] the next step was to transfer money from the Binance Wallet to the account of that particular application.
Each such application had on average 5,000 customers with HFC having maximum of 30,000 customers, it added. The reported range of investment per person was from $100 to $80,000, with an estimated average of $2,000 per person thus making estimated scam stand at nearly $100 million.
“At the same time, all the members of the group were added in groups on Telegram where so-called expert betting signals, on the rise and fall of Bitcoin, were given by the anonymous owner of the application and admins of the Telegram groups,” the FIA press release said.
These apps crashed once a considerable capital base was established, robbing people of millions of dollars through the “referral bonus process”, it added.
FIA Cyber Crime Sindh stated that it has taken necessary actions to reach to the root of this scam. “All the Pakistani Bank accounts linked to such apps have been debit blocked; Telegram is being contacted to provide the whereabouts of admins of fraudulent apps; Social media influencers, promoting these apps, are being served with legal notices to explain their point of contact with apps.”
“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,” the statement said.
“In case of non-compliance, FIA Cyber Crime will be justified to recommend financial penalties on Binance through the State Bank of Pakistan,” the handout conlcuded.
