2 arrested in Pakistan over Rs 200 mn fraud in online business

PTI, Jan 10, 2022, 1:34 PM IST

Pakistani authorities have arrested two people in connection with a USD 1.14 million online business scam, days after the country’s top investigation agency launched a probe into a cryptocurrency investment fraud of more than USD 100 million.

The Federal Investigation Agency (FIA) carried out a raid in Karachi and arrested two people involved in the Rs 200 million (USD 1.14 million) scam in the name of the online business, The Nation newspaper reported on Sunday.

A Director and a CEO of the online companies have been arrested, an official said.

A case has been registered with the FIA against the suspects for making suspicious transactions of Rs 200 million.

Last week, the FIA detected an online fraud of USD 100 million (Rs 17,587 billion) using a cryptocurrency and issued notice to the local representative of Binance – the world’s largest cryptocurrency exchange.

”We launched a probe after receiving complaints regarding a fraud involving billions of rupees being committed using nine online applications,” FIA cybercrime wing Additional Director Imran Riaz told the media.

Riaz said that cryptocurrency is being used in money laundering and terror financing.

He shared that people invested between USD 100 to USD 80,000 in fraud applications and the developers of the apps were linked to the Binance cryptocurrency, the News International newspaper reported.

According to details, some mobile applications were offering Pakistanis to invest in the virtual currency. These applications were linked to Binance, the leading virtual platform for buying and selling Bitcoins and other similar cryptocurrencies, according to the paper.

However, these applications suddenly vanished and investment of around Rs 17.6 billion made by Pakistanis were lost. The authorities said the unique way was adopted for fraudulent activity. The persons who launched the applications had connections with the crypto exchange.

It is noted that the State Bank of Pakistan (SBP) through a circular issued in 2018 informed the general public that it had not authorised or licensed any individual or entity for the issuance, sale, purchase, or investment in any such virtual currencies, coins, tokens in Pakistan.

Recently, a report released by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) disclosed that Pakistanis had a staggering USD 20 billion worth of assets in cryptocurrencies.

The Federal Board of Revenue has also launched a probe into the investment in the cryptocurrencies to identify investors and their source of investment.