The government of Pakistan received various complaints of investors being misled into sending funds to third-party wallets.
Pakistan is the third-highest Index of Chainalysis Global Crypto Adoption Index 2021, only behind India and Vietnam. In December, Nasir Hayat Magoon, the president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), claimed that citizens of Pakistan hold $20 billion in cryptocurrencies.
The Federal investigation agency of Pakistan has detected an online fraud of $5.7 million involving Binance. FIA has issued a notice to Binance, with demands of cooperation on the issue. Criminal investigations started as soon as the Pakistani government was notified. FIA’s Cyber Crime Wing summons Hamza Khan, Binance Pakistan’s general manager, to define a link between Binance and “fraudulent online investment mobile applications.”
The frauds were supposed “investments” with unrealistic high returns. The victims were asked to transfer funds from their Binance wallets to a third-party wallet. The scheme benefitted old clients at the cost of new clients, making it the well-known Ponzi scheme. These scammers would disappear once they have collected a huge amount of money worth millions.
Victims also mentioned some apps that suddenly stopped working after transferring funds. Pakistani agencies identified at least 11 applications; AVG86C, BX66, UG, TASKTOK, 91fp, HFC, HTFOX, FXCOPY, OKIMINI, BB001, and MCX are the names of apps that the agency identified.
As per reports, 26 Binance wallet addresses have been identified where the amount may have been transferred. The agency has asked Binance to block these wallet accounts and restrict them from debiting the same. They have also been asked to share the details of these blockchain wallet accounts.
The FIA has blocked the bank accounts linked with the fraudulent apps. The agency has also warned of imposing penalties if Binance holdings do not cooperate. Supporting documents and integration mechanisms of API, which were used by scamsters to connect with Binance services.