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Crypto Exchange Binance Caught in Middle of $100 Million Scam in Pakistan

The federal investigation agency (FIA) of Pakistan has sent an official notice to crypto exchange Binance that is being named in a major scam. The FIA will be investigating the complaints of Binance users who have alleged that the crypto exchange made them transfer funds into unfamiliar third-party wallets. The scam is estimated to have costed people a collective total of around $100 million (roughly Rs. 739 crore). A notice has also been sent to Binance headquarters located in the British oversees territory of Cayman Islands for answers.

In Pakistan, the notice has been addressed to Hamza Khan, the general manager and growth analyst of the Binance unit there. The investigative authorities have asked Khan to explain the company’s association to “fraudulent online investment mobile applications”, a report by Pakistan’s Dawn News reported.

In initial probe, Pakistani authorities managed to identify around eleven fraud apps that were collecting the users’ funds unlawfully. The names of these apps are random abbreviations that may or may not mean something. Some of these apps are HFC, MCX, HTFOX, BB001, and AVG86C among others.

Later, the fraudsters also lured investors to join Telegram channels offering them “expert betting signals”. Each of these malicious Telegram channels were hosting up to 5,000 people each, reports added.

Images of FIA’s notice to Binance have been circulating on Twitter.

The crypto exchange has promised complete cooperation with the authorities into this case.

In a statement, FIA cybercrime wing Additional Director Imran Riaz has confirmed to the media that Binance got in touch with them assuring cooperation, a report by The News said.

Binance Pakistan has also posted a message promising cooperation on Twitter while saying that will not be commenting on the matter.

Binance launched in 2017 with its head office in China. Later, when China began tightening thr noose around crypto activities, the company moved its headquarter to Cayman Island.   

It, however, is not the only crypto exchange to be facing legal action in Asia presently. 

An array of crypto exchanges have recently found themselves in the middle of trouble in India as well. 

Earlier this month, India launched an investigation into a number of crypto exchanges, including CoinSwitch Kuber, CoinDCX, WazirX, and Unocoin for allegedly evading taxes.  

Scammers have been getting active in the crypto sector, several reports and rising number of cases have shown. 

In December 2021, a report by research firm Chainalysis revealed that scams mooched off over $7.7 billion (roughly Rs. 58,697 crore) from crypto investors last year. 


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