Pakistan’s Federal Investigation Agency (FIA) has sent an official message to crypto exchange Binance which is being named in a major scam. The FIA will investigate complaints from Binance users who claimed that they have been transferring funds to unknown third-party wallets through the crypto exchange. The scam is estimated to have cost people around $100 million in total (approximately Rs. 739 crore). A message has also been sent to Binance’s headquarters, located in the British Cayman Islands Territory, for replies.
In Pakistan, the message is addressed to Hamza Khan, the Binance unit’s chief executive and growth analyst there. Investigative authorities have asked Khan to explain the company’s association with “fraudulent online investment applications,” a report by Pakistan’s Dawn News said.
During the initial investigation, Pakistani authorities managed to identify about 11 rogue apps that illegally collected money from users. The names of these apps are random abbreviations that may or may not mean anything. Some of these apps include HFC, MCX, HTFOX, BB001, and AVG86C.
Later, the fraudsters also enticed investors to join Telegram channels and offer them “expert betting signals”. Each of these malicious Telegram channels has hosted up to 5,000 people each, according to reports.
Footage of a message from the FIA to Binance has been circulating on Twitter.
The crypto exchange has pledged full cooperation with the authorities in this matter.
In a statement, FIA cybercrime wing Additional Director Imran Riaz confirmed to media that Binance has contacted them to ensure cooperation, according to a report by The News.
Binance Pakistan has also posted a message promising cooperation on Twitter, but says it will not comment on the matter.
We do not make statements on specific matters with regulatory and law enforcement authorities. From a policy point of view, however, it is our general approach to cooperate in investigations where possible. In particular, Binance is trying to work closely with law enforcement and regulatory authorities
— Binance Pakistan :flag-pk: (@BinancePk) January 7, 2022
Binance was launched in 2017 with headquarters in China. Later, as China began tightening its grip on crypto activities, the company moved its headquarters to Cayman Island.
However, it is not the only crypto exchange currently facing legal action in Asia.
A series of crypto exchanges have recently encountered problems 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 alleged tax evasion.
Scammers have become active in the crypto sector, according to several reports and an increasing number of cases.
In December 2021, a report by research firm Chainalysis revealed that scams smuggled more than $7.7 billion (about Rs. 58,697 crore) from crypto investors last year.
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