Binance comes under scrutiny amid mobile app scam
Binance, a popular cryptocurrency exchange, is under investigation by Pakistani regulators for a multi-million dollar Ponzi scheme, Dawn reported on Friday (January 7th).
The cybercrime wing of the Federal Investigation Agency (FIA) issued an advisory to the company, according to the report.
Many online investment scams operate in Pakistan, where investors are promised a high rate of return if they sign additional clients, according to the report.
“These plans benefit old clients at the expense of new clients and end up disappearing when they did. [a] a substantial capital base worth billions of rupees, ”the FIA said, according to the report.
In addition, Pakistani residents contacted the agency on December 20 to say that at least 11 mobile apps had stopped working and cheated them out of billions of rupees, according to the report.
“The modus operandi of these apps was to ask people to register on Binance Crypto Exchange… the next step was to transfer money from the Binance wallet to that particular app’s account,” the FIA said, according to the. report.
Once considerable capital was raised, these apps crashed, stealing millions of dollars from investors through the so-called referral bonus process, according to the report.
“The range of investment per person reported ranged from $ 100 to $ 80,000 with an estimated average of $ 2,000 per person, making the scam estimated at nearly $ 100 million,” said the FIA , according to the report.
The FIA said action must be taken to uncover the scam and Binance must adopt a way to help Pakistan track financial crimes, according to the report.
Meanwhile, the UAE is cracking down on promoters of online cryptocurrency scams. Cybercriminals now face five years in prison and a fine of up to more than $ 270,000 under sweeping legal reforms.
Read more: Crypto crooks will face jail time and heavy fines in UAE
In other news, Coinbase Global, an American company that operates a cryptocurrency exchange platform, has a habit of cooperating with law enforcement agencies and regulators in the United States and in abroad, as part of its strategy of being known as a compliant exchange.
See more : As crypto crime grows, exchanges like Coinbase are key to catching scammers