'Online scam': FIA issues notice to crypto exchange Binance

Islamabad: In a first ever action against crypto world in Pakistan , the Federal Investigation Agency (FIA) has issued a notice to cryptocurrency exchange Binance's representative in Pakistan in connection with an online fraud of billions of dollars, GNN reported on Friday.

The suspects had allegedly used cryptocurrency for the transfer of the money into foreign bank accounts.  

The FIA’s cybercrime wing had reportedly received complaints from nine online applications.

In a press release, the FIA said that the Cyber Crime Wing had issued an order of attendance to Hamza Khan, the general manager/growth analyst at Binance Pakistan, to explain his position on the company's linkage to "fraudulent online investment mobile applications".

"A relevant questionnaire has also been sent to [the] Binance Headquarters [in] Cayman Islands and Binance US to explain the same," the handout said.

The agency said that many online investment frauds were operating in Pakistan on the pattern of Ponzi schemes where investors were promised high returns on their investment if they brought in more clients.

"These schemes benefit old clients at the cost of new clients and ultimately disappear when they have made [a] substantial capital base worth billions of rupees," the handout said.

The FIA further added that on Dec 20, 2021, people from all over the country contacted the agency and said that at least 11 mobile apps had stopped working and had "defrauded people of billions of rupees".

These apps were identified as MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK and 91fp.

 According to FIA’s Cyber Crime Wing Additional Director Imran Riaz,  cryptocurrency is also being used for ‘money laundering and terror financing’.

He further said one of the affected persons had invested $100 to $80,000.  “The suspects had invented a novel way of committing fraud through the development of an online application,” he elaborated.   

"The cryptocurrency accounts of ‘fraudsters’ would be blocked," Riaz said.