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Pakistan investigates Binance in connection with multi-million dollar cryptocurrency scam

Pakistan investigates Binance in connection with multi-million dollar cryptocurrency scam

Pakistan's federal agency has launched a criminal investigation after receiving numerous complaints about an ongoing scam in which investors were misled into sending funds from Binance wallets to unknown third-party wallets, the Cointelegraph reported.

Pakistan's Federal Investigation Agency (FIA), issued a formal notice to cryptocurrency exchange Binance in an attempt to uncover links around a multimillion-dollar cryptocurrency scam in the region. The Pakistani government launched a criminal investigation after receiving numerous complaints about an ongoing scam in which investors were misled into sending funds from Binance wallets to unknown third-party wallets. According to local reports, the Interior Ministry's cybercrime wing issued a summons to Binance Pakistan CEO Hamza Khan to uncover the exchange's connection to “fraudulent mobile online investment apps”. “A related questionnaire was also sent to Binance headquarters in the Cayman Islands and Binance US to explain the same”, – the notice said. The investment scams in Pakistan were carried out by asking users to register on Binance and transfer funds to third-party wallets under the pretext of unrealistic returns. According to the FIA notice: “These schemes benefit old customers at the expense of new ones and eventually disappear when they have amassed significant capital of billions of rupees”. Based on citizen complaints, the Pakistani agency has identified at least 11 fraudulent mobile apps that suddenly stopped working after successfully stealing user funds. The apps identified by FIA – are MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK and 91fp. In addition to directing users to register on Binance to transfer funds, the scammers added victims to a Telegram group to provide “expert betting signals”. Each app averaged about 5,000 customers. The notice adds: “At least 26 suspicious blockchain wallet addresses (Binance wallet address) were identified to which fraudulent amounts may have been transferred. A letter was sent to Binance Holdings Limited demanding details of these blockchain wallet accounts and to block them by debit”. Binance was also asked for details, including official supporting documents and the API integration mechanism used by the fraudsters to connect to Binance services. While the FIA is actively blocking bank accounts that have been linked to suspicious apps, the notice warns: “In the event of non-compliance, FIA Cyber Crime will have the right to recommend financial sanctions against Binance through the State Bank of Pakistan”.

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