Pakistan’s Federal Investigation Agency (FIA) has issued a notice to the world’s largest cryptocurrency trading platform Binance in connection to an alleged crypto scam worth nearly $100 million in the country. According to the notice and subsequent press release issued by Karachi-based FIA, the agency said “On Monday 20th of December, people from all over Pakistan started contacting FIA Cyber Crime Sindh through social media and disclosed about at least 11 mobile applications namely MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK, and 91fp that these applications have stopped working over a period of time and have defrauded Pakistani people of billions of rupees.”
“The Federal Investigation Agency Cyber Crime Sindh’s action on 11 online investment apps integrated with @binance. The apps defrauded Pakistanis with about 100 million $. A letter has been sent to Binance as well as notice to GM Binance Pakistan,” Imran Riaz, Head of Cyber Crime Zone, Sindh, FIA tweeted on Friday.
FIA had sent a questionnaire to Binance headquarters at the Cayman Islands and Binance US asking conditions under which permission was granted to these apps/companies to get linked with Binance exchange apart from other details. An ‘Order of Attendance’ was also issued the Binance Pakistan’s General Manager/Growth Analyst Hamza Khan to explain his position on the linkage of “fraudulent online investment mobile applications with Binance.”
Each application had on average 5,000 customers with HFC reportedly having a maximum of 30,000 customers, the agency said adding that the reported range of investment per person was from 100 USD to 80,000 USD with an estimated average of 2,000 USD per person, thus making the estimated scam stand at nearly 100 million US dollars.
Binance in a tweet on Friday said, “We do not comment on specific matters with regulatory and law enforcement authorities. However, as a matter of policy, our general approach is to cooperate with investigations wherever possible. Specifically, Binance tries to work closely with the law enforcement and regulatory community in an effort to develop best practices, mitigate and thwart new methods of criminality and prevent illicit proceeds from entering our exchange. We are working with the Federal Investigation Agency to resolve these issues.”
The scam was reported days after the local industry body Federation of Pakistan Chamber of Commerce and Industry in its research last month said that Pakistanis held $20 billion in cryptocurrencies in 2020-21.