The Story of the $100 Million Scam

In connection with an alleged crypto fraud involving approximately $100 million in Pakistan, the Federal Investigation Agency (FIA) has sent a warning to Binance, the world’s largest cryptocurrency trading platform. “On Monday 20th of December, humans from across Pakistan contacted FIA Cybercrimes Sindh via social networks and divulged about this at least 11 mobile apps notably MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK, as well as 91fp that all these solutions have quit functioning over an amount of time and have defrauded Pakistani people of billions of rupees,”

The Background Story

“Action was taken by the Federal Investigation Agency Cyber Crime Sindh on 11 online investing applications linked to @binance.” The applications robbed Pakistanis of over a hundred million dollars. Binance has received a letter as well as a notification from GM Binance Pakistan.” On Friday, Imran Riaz, the FIA’s Head of Cyber Crime Zone in Sindh, tweeted.

A Little More Detail

Apart from other facts, FIA issued a survey to Binance headquarters in the Cayman Islands and Binance US, inquiring about the terms under which authorization was provided to these apps/companies to join up with Binance exchange. Binance Pakistan’s General Manager/Growth Analyst Hamza Khan was also given an ‘Order of Attendance’ to clarify his opinion on the relationship of “fraudulent online investing mobile applications with Binance.”  According to the agency, each application had an average of 5,000 customers, with HFC possessing the highest of 30,000 customers. The disclosed scope of financing per person was from $100 to 80,000 dollars, with an approximate amount of 2,000 dollars per person, putting the total scam at nearly 100 million dollars.

“We do not discuss on specific grounds with regulatory and legal enforcement bodies,” Binance stated in a tweet on Friday. However, as a general principle, we strive to assist with investigations wherever feasible. Binance, in particular, seeks to collaborate work with law authorities and regulatory agencies to create best practices, mitigate and fight emerging forms of crime, and keep illegal funds out of our exchange. We’re collaborating with the Federal Bureau of Investigation to get to the bottom of these problems.”

The swindle was uncovered only days after the Federation of Pakistan Chambers of Commerce and Industry estimated last month that Pakistanis had $20 billion in digital currencies in 2020-21, according to its study.

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