Notably, the reports that FIA has also asked for the attendance of Hamza Khan, the general manager/growth analyst at Binance Pakistan, to explain the company’s position. A release issued in this case noted,
“A relevant questionnaire has also been sent to [the] Binance Headquarters [in] the Cayman Islands and Binance US to explain the same.”
The development comes on the backdrop of increasing investment frauds, especially Ponzi schemes that promise sky-high returns to Pakistanis, the agency noted.
“These schemes benefit old clients at the cost of new clients and ultimately disappear when they have made [a] substantial capital base worth billions of rupees.”
Scope of the scam
Here, the crypto scam in question is estimated to be close to $100 million. Furthermore, it came to light in December after several complaints. The watchdog said, at least 11 mobile apps were identified that “defrauded people of billions of rupees,” including names like MCX, HFC, HTFOX, FXCOPY, OKIMINI, etc. FIA further explained,
“The modus operandi of these applications was to ask people for registration at Binance Crypto Exchange (Binance Holdings Limited) […] the next step was to transfer money from the Binance Wallet to the account of that particular application.”
Therefore, Binance will be required “to provide…