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Pakistan Federal Investigation Agency (FIA) Issue Notice To Binance Probing A Multi-Million Dollar Scam

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On Friday, Pakistan’s Federal Investigation Agency (FIA) detected an online fraud of Rupee 100 (Rs) billion using cryptocurrencies and issued a notice to the local representative of Binance.

Business Recorder sharing details of the fraud writes additional Director of the FIA cybercrime wing Imran Riaz said that those involved in the online fraud transferred the money abroad via cryptocurrency.

“We launched a probe after receiving complaints regarding a fraud involving billions of rupees being committed using nine online applications,” he said and added that they had sought answers from a representative of the cryptocurrency in Pakistan.

He shared that people invested between $100 to $80,000 in fraud applications. “Those who developed these apps were linked to cryptocurrency,” the FIA official said.

He said they had sought details of all those linked to the fraud with the Binance exchange, and their crypto accounts would be suspended.

FIA Cyber Crime Wing on Friday issued a notice to an official from Binance, a popular cryptocurrency exchange while investigating a multi-million dollar scam.

The agency, seeking a reply from the Binance official, added that a questionnaire has also been sent to Binance Headquarters.

“The FIA Cyber Crime Sindh has issued an 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,” stated the handout.

“A relevant questionnaire has also been sent to Binance Headquarters Cayman Islands and Binance US to explain the same,” added the statement released by the FIA Cyber Crime Wing Sindh on Friday.

The FIA said that many online investment frauds are going on in Pakistan on the pattern of Ponzi Schemes wherein investors are promised unrealistically high returns on their investment if they bring in more clients.

“These schemes benefit old clients at the cost of new clients and ultimately disappear when they have made substantial capital base worth billions of rupees.”

The statement added that on December 20, people contacted FIA Cyber Crime Sindh through social media and disclosed at least 11 mobile applications, namely MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK, and 91fp, stopped working over some time “and have defrauded Pakistani people of billions of rupees.”

Each such application had on average 5,000 customers, with HFC having a maximum of 30,000 customers, it added.

The FIA official further shared that cryptocurrency is used in money laundering and terror financing. Last year in September, the central bank opposed digital currency in the country, saying it has already issued an advisory warning against trade in virtual currency as it is not legal tender.

During a Sindh High Court hearing, a petitioner stated that the State Bank imposed a ban on digital currency on April 6, 2018, despite developing countries earning significant revenue from the cryptocurrency, which doesn’t threaten national interests.

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Ammara Mubin is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Ammara authored more than 1,000 stories for TheCryptoBasic, CryptoComes and other fintech media outlets. She is particularly interested in regulatory trends around the globe that are shaping the future of digital assets.


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