Lahore: The Sindh Cybercrime Unit (FIA) on Thursday summoned a representative of global crypto exchange Binance in a scam that is estimated to have siphoned off $100 million (about 17.5 billion rupees) in Pakistanis.
A press release from the FIA said that on December 20, people from across the country began contacting FIA Cyber Crime Sindh through social media and revealed no fewer than 11 mobile applications namely MCX, HFC, HTFOX, FXCOPY and OKIMINI and BB001, AVG86C, BX66, UG, TASKTOK, 91fps that stopped working. All of these apps are linked to Binance wallets.
The discontinuation of these apps has resulted in dozens of people in Pakistan losing billions of rupees.
“The way these apps worked was to require people to register with the Binance Crypto Exchange (Binance Holdings Limited) that is dedicated to trading in virtual currencies such as Bitcoin, Ethereum, DogeCoin, etc.,” the FIA said. “The next step was to transfer funds from Binance Wallet to the account of this particular app.”
The FIA explained that victims were simultaneously added to groups on the Telegram messaging service where so-called expert betting signals, on the rise and fall of Bitcoin, were given by the anonymous owner of the app and the administrators of Telegram groups. “Once a large capital base was established, these apps crashed, thus stealing millions of dollars through the referral bonus process,” the FIA said.
According to the initial findings of the investigation, each app had an average of 5,000 customers who had an HFC app that is said to have a maximum of 30,000 customers. According to the FIA, the reported range of investment per person was from $100 to $80,000 with an estimated average of $2,000 per person, making the estimated scam around $100 million.
The FIA has written to Binance headquarters in the Cayman Islands and Binance US to explain their position on the matter.
“We do not comment on specific matters with regulatory and law enforcement authorities. However, as a general policy, our general approach is to cooperate with investigations where possible. Specifically, Binance is working closely with law enforcement and the regulatory community in an effort to develop best practices, mitigate and thwart new methods of criminality and prevent illicit proceeds from entering the exchange,” said a Binance representative summoned by the FIA. he won.
In the wake of the scam, Sindh FIA Cyber Crime debit wing debited Pakistan bank accounts linked to these apps, contacted Telegram to provide whereabouts of fraudulent app managers, and social media influencers promoting these apps were served with legal notices to explain their view of Connect to apps among other measures.
“At least 26 suspicious blockchain wallet addresses (Binance wallet addresses) have been identified where fraudulent amounts may have been transferred,” the FIA said. In addition, a letter was written to Binance Holdings Limited giving details of the blockchain wallet accounts as well as banning debits from them.
Binance was also asked to provide the terms, official supporting documents, and the API (applications) integration mechanism with Binance.
It is to be noted that the State Bank of Pakistan (SBP) has not authorized or licensed any individual or entity to issue, sell, buy, exchange or invest in any such virtual currencies, coins or tokens in Pakistan. Despite the matter, Binance is the largest unregulated virtual exchange where Pakistanis have invested millions of dollars.
The FIA said it has started to closely monitor the peer-to-peer transactions that Pakistanis make on Binance to curb terrorist financing and money laundering as Binance is the largest user-friendly platform that facilitates such activities.
FIA Cyber Crime expects Binance to take a liberal and speedy approach in helping Pakistan track down all these financial crimes. “In the event of non-compliance, the FIA cybercrime will be justified in recommending financial sanctions to Binance through the State Bank of Pakistan,” the FIA said.