The Federal Investigative Agency's (FIA) Cyber Crime Wing said on Friday that it has 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 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.
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“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 return 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 about at least 11 mobile applications namely MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK, and 91fp stopped working over a period of time “and have defrauded Pakistani people of billions of rupees”.
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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.
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."
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At least 26 suspect blockchain wallet addresses (Binance address) have been identified where fraudulent amounts may have been transferred. Furthermore, the letter has been written to Binance Holdings Limited to give details of these blockchain wallet accounts.
"Binance has also been asked to provide with conditions, official supporting documents, integration mechanism of these API’s with Binance," it added.
The Cyber Crime Wing said that it expects Binance will adopt a liberal and swift approach in helping Pakistan track all these financial crimes.
“In case of non-compliance, FIA Cyber Crime will be justified to recommend financial penalties on Binance through State Bank of Pakistan,” it added.