Pakistan investigating Binance for involvement in multi-million dollar scam


Binance’s wrangles with regulators have not ended despite the beginning of a new year. Pakistan’s Federal Investigation Agency (FIA) has issued a formal notice to the Binance cryptocurrency exchange regarding a multi-million scam.

The FIA has written notice to Binance asking the giant exchange to identify the links involving the fraud happening in the region.

Pakistan investigating Binance

The government of Pakistan has launched a criminal case against Binance after receiving several complaints of fraud where investors were misled into sending funds from Binance wallets to unknown third-party wallets.

A local publication stated that the Cyber Crime division of the FIA had issued an order of attendance to the general manager of Binance in Pakistan, Hamza Khan. The FIA stated that this order was due to “fraudulent online investment mobile applications.”

The notice also added that the government body had sent a related questionnaire to Binance’s headquarters in the Cayman Islands and Binance US regarding the issue.

Multi-million dollar scam

The issue regarded instances where users were asked to register on the exchange and then transfer funds to third-party wallets, claiming they would receive returns. However, the FIA stated that the scheme only benefited old clients, while new clients did not receive any benefits.

The FIA received complaints from citizens, with the agency stating that at least 11 fraudulent mobile applications were identified that stopped functioning after user funds were stolen. Besides asking clients to register on Binance, the individual/individuals behind the scam asked victims to join a Telegram group for expert insights.

“At least 26 suspect blockchain wallet addresses (Binance wallet address) have been identified where fraudulent amount may have been transferred. A letter has been written to Binance Holdings Limited to give the details of these blockchain wallet accounts as well as to debit block them,” the report stated.

The FIA has already blocked the bank accounts linked to the fraudulent dealings. However, the notice warns that if Binance fails to identify third-party wallets, the agency will impose financial penalties on the exchange. Binance is yet to issue an official public response on the matter.

Pakistan is a major cryptocurrency hub. Last December, the president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Nasir Hayat Magoon, revealed that Pakistanis held cryptocurrencies worth $20 billion. Additionally, a report from Chainalysis stated that Pakistan was the third-largest country in terms of crypto adoption.

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