FIA probes Binance in mega crypto scam

FIA probes Binance in mega crypto scam

KARACHI – The Federal Investigation Agency (FIA) has summoned representatives of Binance, a leading international buy/sell platform for cryptocurrencies, as part of an investigation into a scam that has left many Pakistanis deprived of billions of rupees.

This marks the first time an international crypto exchange has been called in for questioning in connection with a financial crime.

The FIA’s action comes in the wake of approximately Rs18 billion being lost in a scam involving nine different mobile applications, all linked to Binance. The transactions, which saw investments in cryptocurrencies abruptly halted, have prompted the investigation agency to take swift action.

According to details, transactions worth billions of rupees were conducted through mobile applications associated with Binance. The FIA has summoned a local representative of Binance in response to complaints against these applications, which were shut down unexpectedly, leaving investors in the lurch.

The FIA believes that the money transferred through these mobile applications was involved in money laundering and terror financing, marking a novel approach adopted by fraudsters to exploit unsuspecting individuals. The investigation is expected to shed light on the extent of the scam and identify those responsible for orchestrating it.

Notably, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) recently reported a substantial investment of $20 billion made by Pakistanis in cryptocurrencies. The FPCCI has urged authorities to regulate and streamline these virtual assets, highlighting the urgency of protecting investments that have already reached the $20 billion mark before they flow into more lenient regulatory environments in other countries.

This development has sparked concerns over the lack of regulatory oversight in Pakistan’s cryptocurrency market. Both the State Bank of Pakistan (SBP) and the Securities and Exchange Companies of Pakistan (SECP) have issued public notices, warning the public that cryptocurrencies are not legal tender in Pakistan. Additionally, they have emphasized that no official investment channels have been authorized due to the inherent risks associated with digital currencies.

The ongoing investigation will likely have broader implications for the cryptocurrency landscape in Pakistan. It underscores the need for robust regulatory measures to safeguard investors and prevent illegal activities in the cryptocurrency space. As the global financial landscape continues to evolve, the regulatory framework surrounding digital assets becomes increasingly crucial to ensure the integrity of financial markets and protect investors from potential scams and fraud.