FIA summons Binance Pakistan head in Rs18b online fraud thumbnail

FIA summons Binance Pakistan head in Rs18b online fraud

The federal Investigation Agency (FIA) is investigating what could be the biggest online fraud of Pakistan’s history.0 seconds of 0 secondsVolume 0% 

Around 55,000 people lost around Rs18 billion in the scam.

As many as 11 mobile applications have been named in the scam. These are MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK, 91fp, said FIA Cyber Crime Reporting Sindh chief Imran Riaz.

The investments made by the users vary from $100(~Rs17,800) to $80,000 (~14,168,000).

HFC Pak even gave its users profit from August to December.

How they defrauded people

The FIA said that the scam worked on the pattern of pyramid scheme. The companies offered unrealistically high returns to customers on their investment for bringing in more investors. This way, those running scheme were able to payoff earlybirds (initial investors) from the money that they receive from new customers. This continued till the scammers were able to accumulate base capital worth billions of rupees, the FIA said in its statement.

The investors were asked to download apps and were asked to convert fiat money into cryptocurrency through Binance or any other digital money changer. The cryptocurrency would then be deposited into investors’ accounts on HFC or other apps.

Those who invested money were also added to groups on Telegram, a heavily-encrypted messaging app. They were given betting tips on whether Bitcoin will up or down.

“They used to give assurance that you won’t lose your money,” said one of the victims. “Some of the users even went all the way to level-8 and when they lost their money, they [the scammers] refunded them,” he added.

But, on December 19, the apps crashed, and those who invested lost every penny.

Now, the FIA has written to the Binance asking them to explain how money was transferred from Binance accounts to apps like HF and HTFOX.

Hamza Khan, who identifies himself the general manager of Binance in Pakistan, has been asked to appear before the agency on January 12, 2022.

The agency have also blocked all the Pakistani bank accounts linked the apps. It has also contacted Telegram to get whereabouts of admins of the fraudulent apps.

The FIA have served notices to social media influencers who were promoting these apps asking them to reveal to reveal point of contact with apps.

At least 26 Binance wallet address have been identified where fraudulent amount may have been transferred.

The FIA has also written to Binance Holdings Limited, asking the company to provide details of these block chain wallet accounts as well as debit block them.

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