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Multi-Million Dollar Crypto Scam: Pakistan to Investigate Binance

Multi-Million Dollar Crypto Scam
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Federal Investigation Agency (FIA) of Pakistan has started a criminal investigation into a multi-million dollar crypto scam that involved people sending crypto funds from their Binance wallet to an unknown third-party wallet.

FIA has sent a notice to Binance exchange, one of the popular crypto exchanges in the country, for identifying its links with the scam.

The Government of Pakistan received numerous complaints regarding multi-million dollar crypto scams. The crypto investors in the country were misled into sending funds from their Binance exchange wallet to a third-party wallet. In light of the matter, the Cyber Crime wing of FIA issued a notice of attendance to the General Manager/Growth Analyst at Binance Pakistan, Hamza Khan.

Khan has to explain his company’s position on “fraudulent investment mobile applications”. Additionally, the relevant questionnaire has been sent to Binance headquarter in Cayman Island and Binance US.

According to FIA, there are many mobile applications working in Pakistan under Ponzi Schemes. People earn a profit by bringing in new customers and once there are no new customers, the app shuts down.

On Dec. 20th, 2021, hundreds of people from the country approached FIA regarding a fraud in which 11 mobile apps stopped working. The apps are known as MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK, and 91fp asked people to make an account on Binance and then send their funds to an account on the particular applications.

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The users of applications were added in telegram groups where anonymous app owners shared bitcoin price signals. Like Ponzi schemes, there was a referral bonus. After collecting a substantial amount of capital the apps started to crash.

FIA has claimed that the scam amount stands at $100M with the average investment per person being $100 to $8000. There are 26 Binance exchange wallets where the money went. FIA has asked Binance to provide details of these accounts as well as debit block them.

Pakistan is among the top countries in terms of Crypto adoption. the lack of job prospects for youth has turned many towards crypto investments.

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