Binance Pakistan Scam: How thousands of Pakistanis were defrauded of billions of rupees

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Binance Pakistan scam

Last week, it emerged that thousands of Pakistanis lost billions of rupees in a major cryptocurrency related scam. The Federal Investigation Agency (FIA)’s cyber crime wing initiated a probe after receiving complaints from across the country.

In a press release, FIA stated that the FIA Cyber Crime Sindh has issued an order of attendance to Hamza Khan, General Manager/Growth Analyst Binance Pakistan (Crypto Currency Exchange) to explain his position on the linkage of fraudulent online investment mobile applications with Binance.

According to the press release, last month, thousands of Pakistani contacted FIA Cyber Crime Sindh through social media. It was revealed that as many as 11 mobile Applications namely MCX,HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK, 91fp stopped working as it defrauded thousands of Pakistani citizens of billions of rupees.

How it all happened:

These 11 mobile Applications, mentioned above, asked users to register at Binance Crypto Exchange (Binance Holdings Limited) meant for trading in virtual currencies like Bitcoin, Ethereum, Dodge Coin etc. These users were then asked to transfer money from their Binance Wallet to the bank account of the particular application, which they were using.

“At the same time all the members of the group were added in groups on Telegram Application where so called expert betting signals, on the rise and fall of Bitcoin, were given by the anonymous owner of the application and admins of the Telegram groups. Once considerable capital base was established, these apps crashed thus robbing people of millions of dollars through Referral Bonus Process,” said the press release.

Following the initial investigation, it emerged that each one of these applications ‘had on average 5000 customers with HFC reportedly having maximum of 30000 customers.’ The FIA press release further revealed: “The reported range of investment per person was from 100 USD to 80,000 USD with an estimated average of 2.000 USD per person thus making estimated scam stand at nearly 100 million US dollars.”

Steps taken by the FIA:

  • The Pakistani bank accounts of these 11 applications have been debit blocked.
  • FIA has approached Telegram to provide them the whereabouts of admins of the fraudulent apps.
  • Social media influencers, promoting these apps, are being served with legal notices to explain their point of contact with the apps.
  • It is the largest unregulated virtual currency exchange where Pakistanis have invested millions of dollars. As Binance is the largest easy-to-go platform facilitating terror financing and money laundering, FIA Cyber Crime Sindh has started steps towards keeping a close eye on peer to peer transactions done by Pakistanis on Binance to curb this menace.

Binance assures FIA of full cooperation:

In a statement, FIA cybercrime wing Additional Director Imran Riaz said that the international crypto exchange contacted FIA and assured its full cooperation in the investigation.

“Binance has nominated a two member team to coordinate with FIA Cyber Crime. They are former investigators with the U.S. Department of Treasury and specialize in cryptocurrency investigations,” he added.

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