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Binance is being investigated in Pakistan for a multi-million dollar cryptocurrency scam.

After receiving many complaints about an ongoing scam that involves investors being duped into transmitting funds from Binance wallets to unknown third-party wallets, Pakistan's federal authorities launched a criminal inquiry.

Pakistan's Federal Investigation Agency (FIA) is said to have filed an official warning to Binance, a cryptocurrency exchange, in an effort to trace the origins of a multi-million dollar crypto fraud in the country.

After receiving many complaints about an ongoing scam that involves investors being duped into transmitting funds from Binance wallets to unknown third-party wallets, the Pakistani government launched a criminal inquiry. The FIA's Cyber Crime Wing has issued an order of attendance to Binance Pakistan's general manager Hamza Khan to identify the exchange's link to "fraudulent online investing mobile applications," according to local news reports.

The notice further stated that "a relevant questionnaire has been addressed to Binance Headquarters Cayman Islands and Binance US to clarify the same." Under the guise of unrealistic profits, investment fraudsters in Pakistan asked people to register on Binance and transfer funds to third-party wallets. The following is taken from the FIA notice:

"These schemes enrich existing clients at the expense of prospective clients, and they eventually vanish once they have amassed a significant capital base worth billions of rupees."

The Pakistani government detected at least 11 fake mobile apps based on citizen complaints that suddenly ceased running after successfully taking the user's payments. MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, UG, TASKTOK, and 91fp are among the apps detected by FIA.

The scammers invited the victims to a Telegram group for delivering "professional betting signals," in addition to directing people to sign up on Binance to transfer the monies. On average, each programme had roughly 5,000 users. The notice said that:

"At least 26 suspect blockchain wallet addresses (Binance wallet addresses) where fraudulent funds may have been transmitted have been found." Binance Holdings Limited has been addressed a letter requesting the data of these blockchain wallet accounts as well as debit blocking them."

Binance has also been asked for additional information, including as formal supporting documentation and the API integration mechanism utilised by the fraudsters to access to Binance's services. Despite the fact that the FIA had already frozen the bank accounts associated to the questionable apps, the notice warned:

"In the event of non-compliance, the Financial Intelligence Agency Cyber Crime will be justified in recommending financial sanctions against Binance through the State Bank of Pakistan."

Binance has yet to react to a request for comment from Cointelegraph.

Pakistanis have $20 billion in crypto assets, according to the chairman of the local association

Nasir Hayat Magoon, head of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), revealed in December 2021 that Pakistani citizens own $20 billion in crypto assets.

The FPCCI president validated the figures based on a chamber study paper, according to Cointelegraph. The 2021 Chainalysis Global Crypto Adoption Index, which ranks Pakistan third behind Vietnam and India in terms of index score, backs up this allegation.

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