Cryptocurrency scam case: Binance pledges 'full support' to Pakistan's FIA

In another development in the ongoing multi-million dollar scam case, Binance, the popular cryptocurrency exchange, has offered "its full support" to the Federal Investigation Agency (FIA).

Binance, the largest exchange in the world in terms of daily trading volume of cryptocurrencies, contacted FIA Cyber Crime Sindh and assured its full support regarding investigations into the financial scam involving 11 fraudulent apps that used Binance blockchain addresses, according to Imran Riaz, Head of FIA Cyber Crime Zone Sindh.

“A telephonic contact was made on Friday night, followed by e-mail contact on Saturday,” said Riaz in a series of tweets on Tuesday.

The development has created a ray of hope for Pakistanis who, as per the FIA, have lost around $100 million in the scam.

“Binance has nominated a two-member team to coordinate with FIA Cyber Crime,” he said, adding that the two members are former investigators with the U.S. Department of Treasury and specialise in cryptocurrency investigations.

“I appreciate the response of Binance, keeping in view the gravity of the issue, and look forward to continued cooperation in unearthing criminal activities based on cryptocurrency,” he said.

Background

On Friday, FIA Cyber Crime Wing issued an order of attendance to Hamza Khan, General Manager/Growth Analyst Binance Pakistan (Crypto Currency Exchange) to explain his position on the alleged link of fraudulent online investment mobile applications with Binance.

The FIA, in its statement, added 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.

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"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,” added the statement.

It stated that on 20th of December, people from all over Pakistan started contacting 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, 91fp that these applications have stopped working over a period of time and have defrauded Pakistani people of billions of rupees.

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According to initial findings, each such application had on average 5,000 customers with HFC reportedly having a maximum of 30,000 customers. 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.

Th FIA added that Pakistanis have invested millions of dollars in Binance. It added that it has started taking steps towards keeping a close eye on peer-to-peer transactions done by Pakistanis on Binance “to curb the menace of terror financing and money laundering as Binance is the largest easy-to-go platform facilitating such activities”.