Pakistani

Pakistanis Lose Millions to Crypto Scam, Pakistan Issues Notice to Binance

08/01/2022 by Idelto Editor

Investors from Pakistan have become victims of a massive fraud using cryptocurrency. The country’s main law enforcement agency has issued a notice to crypto exchange Binance in relation to the scam which resulted in the loss of $100 million dollars for Pakistanis, media reports revealed.

Fraudsters Lure Pakistanis to Invest in Cryptocurrency Through Binance

Pakistan’s Federal Investigation Agency (FIA) has uncovered a crypto investment scam that has allegedly cost Pakistani citizens some 17.7 billion rupees (around $100 million). Providing details on the case, Imran Riaz, director of the FIA cybercrime wing, said on Friday that the organizers used cryptocurrency. Quoted by local media, Riaz announced:

We launched a probe after receiving complaints regarding a fraud involving billions of rupees being committed using nine online applications.

The fraudsters employed mobile apps offering Pakistanis crypto investment opportunities and people sent between $100 and $80,000, or an average of $2,000 per person. Investors were urged to register at Binance, the world’s leading crypto exchange, and transfer the money from the Binance wallet to accounts linked to the applications. On Dec. 20, authorities were contacted by many users who complained that around a dozen apps had suddenly stopped working.

“During the inquiry, it was found that the fraudulent accounts of different applications, namely, MCX, HFC, HTFOX, FXCOPY, OKMINI, BB001, AVG86C, BX66, 91fp, TASKTOK, were linked with Binance wallets,” officials detailed. Each had an average of 5,000 customers. The FIA has issued a notice to Hamza Khan, identified as Binance’s representative for Pakistan, and summoned him to appear in person on Jan. 10.

“The FIA Cyber Crime Sindh has issued order of attendance to Hamza Khan, General Manager/ Growth Analyst at Binance Pakistan (Crypto Currency Exchange) to explain his position on the linkage of fraudulent online investment mobile applications with Binance,” the FIA said, quoted by the Express Tribune and other news outlets. “A relevant questionnaire has also been sent to Binance Headquarters Cayman Islands and Binance US to explain the same,” the agency added in a press release.

Authorities to Keep Close Eye on Pakistani Crypto Transactions

The FIA claims that it has identified 26 wallet addresses at Binance used to transfer the money. “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 agency stated, adding it had also requested supporting documentation and information about the apps’ integration with the coin trading platform.

Noting that Binance is the “largest unregulated virtual currency exchange” where Pakistanis have invested millions of dollars, the FIA warns that in case of non-compliance, its cybercrime unit could recommend the State Bank of Pakistan (SBP) impose financial penalties. It has now started to closely monitor transactions made by Pakistanis on the exchange.

Law enforcement officials are also reaching out to the popular messaging app Telegram as members of the scheme were added to various groups spreading signals on the price fluctuations of bitcoin. The FIA is serving legal notices to social media influencers who have been promoting the apps and taking steps to block all bank accounts linked to the scam.

In December, the Federal Investigation Agency froze over 1,000 bank accounts and cards used by crypto traders from Pakistan. The purchase and sale of cryptocurrencies is still prohibited in the country as per a circular issued by the SBP in April 2018. Despite the ban, a recent report revealed that Pakistanis have invested $20 Billion in crypto assets. Calls have been mounting for the government to regulate related transactions.

Do you expect Pakistan to further restrict crypto investments and trading after this fraud case? Let us know in the comments section below.

Pakistan Freezes Over 1,000 Accounts and Cards Used For Crypto Trading

30/12/2021 by Idelto Editor

Authorities in Pakistan have reportedly moved to seize hundreds of bank accounts and cards belonging to cryptocurrency traders. According to local media, they have been allegedly used to make transactions worth close to $300,000 through digital asset exchanges, including major platforms.

Pakistan Government Blocks Cards Used to Buy Cryptocurrency, Media Reveals

Bank accounts in the names of 1,064 individuals have been frozen by Pakistan’s Federal Investigation Agency (FIA). The law enforcement authority acted on request from the Cyber Crime Reporting Center (CCRC) in Islamabad, the Pakistan Observer informed readers on Wednesday.

Officials claim the accounts have been utilized to process transactions worth a total of 51 million Pakistani rupees (around $288,000) made by persons to and from a number of crypto exchanges, among which are well-known platforms such as Binance, Coinbase, and Coinmama.

The agency has also blocked their credit cards used to buy and sell digital coins, the publication added. It also reminded residents that the State Bank of Pakistan (SBP) prohibited the purchase and sale of cryptocurrencies with a circular issued by its Banking Policy and Regulation Department in April 2018.

Despite the ban, however, cryptos like bitcoin have enjoyed growing popularity among investors in the country. According to an estimate from a recently published report by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Pakistanis hold $20 billion worth of cryptocurrency.

At a press conference last week, FPCCI President Nasir Hayat Magoon noted that the quoted valuation of the digital currency owned by Pakistanis is based on research carried out by the association’s Policy Advisory Board. In reality, the true total of the crypto holdings may be much higher, as many Pakistanis are buying coins via peer-to-peer deals which remain undetected.

Magoon also called on the government to introduce a relevant policy to regulate and facilitate crypto-related transactions, pointing out that the regional rival, India, has already taken steps to implement some rules for the sector. His association recommends the adoption of a legal framework aligned with the guidelines issued by international organizations such as FATF and IMF.

Do you think Pakistanis will continue to invest in cryptocurrencies despite the restrictions imposed by authorities in Islamabad? Let us know in the comments section below.

Pakistanis Own $20 Billion in Crypto, Report Reveals

23/12/2021 by Idelto Editor

Pakistanis Own $20 Billion of Crypto, Report Reveals

In the absence of regulations, people in Pakistan have invested a serious amount of money in digital assets. New research claims Pakistanis keep some $20 billion in cryptocurrency, allegedly more than what their central bank has in foreign reserves.

Government Urged for Regulations as Study Shows Pakistanis Hold $20 Billion in Cryptocurrency

The Pakistani nation owns more cryptocurrency than foreign reserves, according to the Pakistan Frontier and other media outlets quoting a new report by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI). The study, produced by the association’s Policy Advisory Board (PAB), has estimated that Pakistanis have held cryptocurrency worth $20 billion in the 2020-21 period.

The authors point out that the popularity of digital currencies like bitcoin has rapidly increased in the last couple of years. With a 711% market growth in 12 months, Pakistan climbed to third place in this year’s Global Crypto Adoption Index calculated by blockchain forensics firm Chainalysis. The country is behind only India and Vietnam.

However, the true total of crypto holdings may be much higher than the figure mentioned in the PAB report. Many residents of the country are buying coins via peer-to-peer deals and these investments remain largely undetected, the Business Recorder notes in an article. Cryptocurrencies are still a gray area in Pakistan as the country’s current legislation does not cover the digital assets.

During a press conference, FPCCI President Nasir Hayat Magoon urged Islamabad to introduce a government policy that would facilitate cryptocurrency transactions, remarking that neighboring India has already taken steps to implement some rules. Magoon insisted that such regulations are needed so that investors can trade their coins in the country instead of in places like Dubai.

The report recommends that Pakistan adopt a legal framework aligned with guidelines issued by the Financial Action Task Force and the International Monetary Fund. The study has been released after Pakistan’s Minister of State for Parliamentary Affairs Ali Muhammad Khan indicated in October that the government is not opposed to cryptocurrency investments in general. Pakistan’s courts have also called on the executive and legislative powers to introduce crypto regulations.

Do you expect authorities in Pakistan to soon regulate the country’s crypto space? Let us know in the comments section below.

Pakistan Government Not Against Crypto Investments, High Court Calls for Regulations

23/10/2021 by Idelto Editor

The executive power will not oppose cryptocurrency investments, a high-ranking government official has told lawmakers in Pakistan. The statement comes as a regional high court has urged the federal government to regulate cryptocurrencies and formed a committee to look into the matter in the coming months.

Minister Says Pakistan Government Has No Objection to Investments in Crypto

Addressing members of the National Assembly this week, Pakistan’s Minister of State for Parliamentary Affairs, Ali Muhammad Khan, recognized cryptocurrency as a new concept. He then noted that the government did not have any objection if the Pakistani youth would take the opportunity to invest through this new technology.

Khan made the comments on Wednesday in response to a calling attention notice in the lower house of parliament regarding the absence of a regulatory framework for cryptocurrencies in the country, the Daily Times reported. The minister explained that the government did not oppose their regulation but pointed out that the State Bank of Pakistan (SBP) had some reservations that needed to be addressed.

The government official revealed that the monetary authority is currently reviewing the matter which should be referred to the Finance Committee. “The SBP was saying we should move forward in this regard very carefully,” Ali Khan added.

The change in course comes three years after the State Bank of Pakistan introduced a cryptocurrency ban. In a circular released in the spring of 2018, the SBP stated that virtual currencies like bitcoin, pakcoin, onecoin and tokens from initial coin offerings are not legal tender and prohibited all dealings with them including holding, transferring, and trading.

At the time, the bank further emphasized that no entity or individual was authorized to issue, buy, sell, or exchange the digital coins. But in April of this year, the head of the SBP, Reza Baqir, said that the regulator was studying cryptocurrencies and their potential for bringing transactions taking place off the books into a regulatory framework.

Regional High Court Orders Government to Report on Crypto Regulations

Again on Wednesday, the Sindh High Court, the highest judicial authority in the southeastern Pakistani province, urged the government in Islamabad to adopt cryptocurrency regulations. It also formed a committee headed by the federal finance secretary and tasked it with producing a report on the matter within the next three months.

During a hearing of a petition challenging the crypto ban, the court insisted steps should be taken to regulate cryptocurrencies in consultation with all stakeholders, including the Security and Exchange Commission of Pakistan (SECP), the SBP, the Ministry of Law and Justice, and the Ministry of Information Technology and Telecommunication. According to a report by the Express Tribune, the proceedings were attended by members of the Federal Investigation Agency (FIA), SBP, and the petitioners.

The publication also informed of another crypto-related case that had been heard at the Lahore High Court with the participation of legal representatives of several interested parties such as the SECP, SBP, FIA, and the federal government. The English-language daily revealed that the court sought assistance from the institutions on the subject, asking them to present relevant legal positions.

As the popularity of cryptocurrencies increases globally, many Pakistanis have turned their attention to these assets as well. The newspaper points to the large number of social media groups explaining how to buy, trade, and mine crypto as Youtube videos in Urdu devoted to bitcoin have hundreds of thousands of views. More and more traders from Pakistan are using online cryptocurrency exchanges and crypto applications often have more downloads than the apps of the country’s largest banks.

Do you expect Pakistan to adopt crypto-friendly regulations in the near future? Tell us what you think in the comments section below.

Pakistan’s Urdubit Exchange Shuts Down After Crypto Ban

12/04/2018 by Idelto Editor

Urdubit, a leading Pakistani bitcoin exchange, has closed down permanently. The news came after the central bank of Pakistan announced a ban on dealings with cryptocurrencies. The trading platform urged customers to withdraw their funds “as fast as possible”. Its team confirmed on social media its operations had been suspended due to the prohibition of crypto transactions. Other exchanges have followed suit.

Also read: Pakistan’s Central Bank Prohibits Crypto Dealings with a Circular

Urdubit Cancels All Bitcoin Orders

Pakistan’s “first bitcoin exchange” announced its decision to shut down after the State Bank of Pakistan barred all financial institutions from processing crypto-related transactions. Urdubit warned its clients to withdraw both their fiat and crypto funds immediately. Through its accounts on Facebook and Twitter, and on its website, the platform said it was terminating services due to the central bank’s ban.

On April 6, SBP issued a circular on the “prohibition of dealing in virtual currencies”, effectively banning crypto transactions in Pakistan. The move came after a similar ban introduced by the central bank in neighboring India. SBP advised commercial banks and payment providers to refrain from using, trading, holding, and transferring digital coins. The document, signed by the State Bank’s director Muhammad Javed, stated that banks and businesses should not facilitate crypto transactions of their customers and account holders.

According to Pakistani media, the Karachi-based Urdubit is the country’s first bitcoin exchange. Launched in 2014, the platform gained popularity along with the world’s leading cryptocurrency. On Saturday its team said in a Facebook post:

Due to the current stance on virtual currencies by the SBP, we are closing Urdubit. Withdraw your funds as soon as possible! Please, buy BTC instantly, as we are canceling orders on, or withdraw your PKR [Pakistani Rupee] immediately.

Its website tells visitors: “Urdubit is shutting down! Withdraw your funds to your bank account or wallet!” The closure was confirmed via Twitter with a message published on Sunday: “Urdubit is closed. All bitcoin withdrawals will be closed today at midnight. Please, withdraw your funds.” The platform’s trading volume increased over the weekend following its decision to close down. According to Bitcoincharts, it traded 26 BTC on April 6 and 6 BTC on the next day.

The Future of Crypto Trade in Pakistan Is Unclear

The prohibition was imposed without an official government mandate and despite the lack of dedicated legislation on cryptocurrencies. Nevertheless, SBP asked Pakistani banks to “immediately” report any crypto transactions to the Financial Monitoring Unit (FMU). Furthermore, the central bank warned citizens against using cryptocurrencies to transfer money abroad. SBP also made it clear that virtual currencies like bitcoin are not considered legal tender in the country.

It remains unclear how many of Urdubit’s customers have managed to get their funds back. Small amounts of bitcoin have been traded after the closure on April 8. One of the warnings states that the exchange should not be held liable if clients failed to withdraw their money. There is no indication as to whether Urdubit intends to reopen again, in case the regulatory situation improves.

According to a company working with Urdubit, the exchange is trying to reimburse its customers. “Governments and banks are going to fight bitcoin because investing in it means a bank run on the central bank,” co-founder of Blinktrade Rodrigo Souza told the local online edition Propakistani. His company has been maintaining the open-source software used by Urdubit.

Other Pakistani exchanges have also decided to stay away from trouble with the SBP. A message on BTCPK’s website states that the price quotes are for informative purpose only. “BTCPK follows prohibition rules as set by the State Bank of Pakistan via Circular No. 03 of 2018,” the trading platform tells its customers. The exchange claims to be “the largest crypto market in Pakistan.”

Authorities in Islamabad have already demonstrated negative attitude towards cryptocurrencies in the past. Crypto traders have been targeted recently by the Federal Investigation Agency of Pakistan. SBP’s ban, however, is the largest clampdown on local cryptocurrency exchanges so far.

Do you think Pakistani exchanges will find alternative ways to provide services to the crypto community in the country? Share your thoughts on the ban in the comments section below.

Images courtesy of Shutterstock.

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