The Federal Investigation Agency (FIA) is now investigating a $100 million (Rs. 17.68 billion) scam involving 11 Binance-linked applications.
Hamza Khan, General Manager/Growth Analyst Binance Pakistan (Crypto Currency Exchange), has been summoned by the FIA Cyber Crime Sindh to explain his viewpoint on the connectivity of fraudulent online investing mobile applications with Binance. To explain the situation, a questionnaire has been issued to Binance Headquarters in the Cayman Islands and Binance US.
Many internet investment scams have recently surfaced in Pakistan, based on the Ponzi Scheme model, in which investors are promised unrealistically huge returns on their investment if they bring in additional consumers.
These scams enrich existing clients at the expense of prospective clients, and the scammers eventually vanish after amassing a large cash base worth billions of rupees.
People from all around Pakistan began contacting the FIA Cyber Crime Wing (Sindh) via social media on Monday, December 20th, reporting at least 11 mobile applications, including MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK, and 91fp. They stated that these programmes had stopped working over time, causing billions of rupees in losses to the Pakistani people.
The goal of these applications was to get individuals to sign up for Binance Crypto Exchange (Binance Holdings Limited), which allows people to trade virtual currencies including Bitcoin, Ethereum, Dogecoin, and others. The following step was to transfer funds from Binance Wallet to the application’s account.
At the same time, all participants were added to Telegram groups, a heavily encrypted instant messaging service where the anonymous owner of the application and admins of the Telegram groups provided so-called expert betting indications on the rise and fall of Bitcoin.
These apps fell after a significant capital base had been developed, defrauding users of millions of dollars through a ‘Referral Bonus Process.’
According to the investigation’s first results, each of the aforementioned applications had an average of 5,000 clients, with HFC having a maximum of 30,000. The alleged investment ranged from $100 to $80,000 per individual, with an estimated average of $2,000 per person, putting the total swindle at approximately $100 million.
The FIA Cyber Crime Sindh has taken necessary actions to reach the root of this scam.
- All the Pakistani Bank accounts linked to such apps have been debit blocked.
- Telegram is being contacted to provide the whereabouts of admins of fraudulent apps.
- Social media influencers, promoting these apps, are being served with legal notices to explain their point of contact with apps.
- At least 26, suspect blockchain wallet addresses (Binance wallet address) have been identified where fraudulent amounts may have been transferred. The letter has been written to Binance Holdings Limited to give details of these blockchain wallet accounts as well as debit block them.
- Binance has been asked to provide conditions, official supporting documents, integration mechanism of these APIs (Applications) with Binance.
To read our blog on A new Bitcoin scam has cost Pakistani investors Rs. 1 billion, click here.