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$100mln scam: FIA issues notice to crypto currency exchange

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KARACHI:– Federal Investigation Agency (FIA) Cyber Crime wing has issued order of attendance to a representative of a crypto currency exchange to explain his position on the linkage of fraudulent online investment mobile applications with Binance.

The agency, in a statement, said that a relevant questionnaire has also been sent to Binance Headquarters Cayman Islands and Binance US to explain the same.

FIA said that recently many online investment frauds are going on in Pakistan on the pattern of Ponzi schemes wherein investors are promised unrealistically high returns on their investment if they bring in more clients. These schemes benefit old clients at the cost of new clients and ultimately disappear when they have made substantial capital base worth billions of rupees.

The agency said that on Monday 20th of December, people from all over Pakistan started contacting FIA Cyber Crime Sindh through social media and disclosed about at least 11 mobile applications namely MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK, 91fp that these applications have stopped working over a period of time and have defrauded Pakistani people of billions of rupees.

“The modus operandi of these applications was to ask people for registration at Binance Crypto Exchange (Binance Holdings Limited) meant for trading in virtual currencies like Bitcoin, Ethereum, Dodgecoin etc. The next step was to transfer money from Binance Wallet to account of that particular application. 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.”

The agency said that as per initial findings of enquiry, each such application had on average 5000 customers with HFC reportedly having maximum of 30000 customers and 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.

Detailing the action taken by the Cyber Crime Wing reach to the root of this scam, the agency said that all the Pakistani Bank accounts linked to such apps have been debit blocked and Telegram is being contacted to provide the whereabouts of admins of fraudulent apps.

It added that social media influencers, promoting these apps, are being served with legal notices to explain their point of contact with app and at least 26 suspect blockchain wallet addresses (Binance wallet address) have been identified where fraudulent amount may have been transferred.

Letter has been written to Binance Holdings Limited to give details of these block chain wallet accounts as well as debit block them.


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