Thousands of Pakistanis lose life savings in $100 million cryptocurrency scam

A Pakistani stockbroker looks at share prices on a computer monitor during a trading session in Karachi, Pakistan, on May 8, 2019. (AFP/File)
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Updated 14 January 2022

Thousands of Pakistanis lose life savings in $100 million cryptocurrency scam

  • Investigators estimate some 37,000 people, mostly from Punjab province, had invested money in the scheme that promised to multiply it
  • In the wake of the crypto scandal, State Bank of Pakistan has recommended banning cryptocurrency in the country

KARACHI: Thousands of Pakistanis have lost their life savings in a $100 million cryptocurrency scam, the Federal Investigation Agency (FIA) has said, as it is probing the case amid recommendations to ban digital currencies in the country. 
The State Bank of Pakistan on Wednesday recommended banning cryptocurrency, arguing that allowing it would cause capital flight. The recommendation followed another by a committee formed by the Sindh High Court that also urged imposing a “complete ban.” 
The recommendations came as the court has been hearing a constitutional petition filed in 2019, which seeks to overturn the central bank’s guidance from 2018 advising banks and payment system operators against processing and investing in virtual currencies. 
The current ambiguity surrounding the legality of digital currency trade has made it easier for Pakistanis to fall prey to the recent scheme. 
Investigators estimate some 37,000 people, mostly from middle-class households in Punjab’s Faisalabad had been defrauded after investing money in the scheme that promised to multiply it. 
“The range of investment was from $100 to $80,000,” Imran Riaz, head of the FIA’s cybercrime division in Sindh, told Arab News earlier this week. “On an average each member has invested $2,000, so with safe estimation we can say that it (amount involved) is $100 million.” 

"There are many stories, many victims stories," he said. "There was one victim ... he sold all the gold of his mother to just get rich quickly, and his mother didn't know about it. He was crying all the time that 'what should I do and how should I tell this to my mother that I've lost everything?'"




Head of Federal Investigation Agency’s Cybercrime Zone in Sindh, Imran Riaz, talks to Arab News about a mega cryptocurrency scam in Karachi, Pakistan, on January 11, 2022. (AN Photo)

The scammers used fraudulent apps such as MCX, HFC, HTFOX, FXCOPY, OKIMINI, BB001, AVG86C, BX66, 91FP, UG, TASKTOK, with the wallets of Binance, the world’s largest cryptocurrency exchange, linked to them. They would add their victims to Telegram groups where they shared advice on cryptocurrency trading. Once the users transferred their money from Binance to the apps used in the scheme, the applications would crash, and victims would no longer have access to their funds. 
Riaz said the FIA had approached Binance to get the record of 26 wallets that were used in the fraud. 
“We have asked Binance that, once you have integrated these apps with the system, (you) must have asked for certain additional security checks,” Riaz said. “On the basis of this information we can make a case and arrest people.” 
The company, he added, had agreed to extend its full support to the FIA and nominated a team comprising two former investigators of the US Department of Treasury to coordinate with FIA. 
Simon Mathews, Binance public relations director for Europe, told Arab News the company was in touch with FIA, but did not provide more details. 
Proponents of cryptocurrency trade in Pakistan argue that such scams are mostly caused by the absence of a legal framework. 
Waqar Zaka, a Pakistani television host and activist who is pleading a case for regulating digital currencies, believes regulation would help keep fraud at bay. 
“I pleaded the court that people have invested billions of rupees in crypto trade and the government should not declare it illegal,” he said. “Instead, it should devise a mechanism to legalize the business, and keep a check on transactions.” 


Pakistan tightens enforcement against smuggling after ban on luxury imports

Updated 24 May 2022

Pakistan tightens enforcement against smuggling after ban on luxury imports

  • The country recently banned import of luxury, non-essential items to save precious foreign exchange
  • Pakistan has been witnessing an increase in current account deficit, with rupee hitting historic lows

ISLAMABAD: The Pakistani government has increased enforcement against the smuggling of contraband items, Finance Minister Miftah Ismail said on Tuesday, days after the South Asian country banned luxury imports to stop the outflow of precious foreign exchange. 

Pakistan last week announced a complete ban on imported cars and non-essential items as its current account deficit continues to spiral out of control and foreign exchange reserves tumble, pushing the Pakistani rupee to historic lows against the US dollar. 

The banned items include imported cars, home appliances, cellular phones, home appliances, shoes, cosmetics, chocolates, among others. 

"As the government has banned the import of a few non-essential items, we fear that smuggling of these items will increase," Ismail said on Twitter.  

"Therefore, we have increased enforcement against professional khaipyas (bootleggers)." 

The minister, however, said that common citizens bringing in a few items from abroad would not be harassed. 

Meanwhile, the Pakistan Customs said in a statement it had increased enforcement at the Karachi airport to prevent smuggling of items, which had recently been banned by the government. 

As a result of heightened vigilance, it said, officials had seized hundreds of kilograms of food stuff and fruit as well as sanitary ware, used mobile phones and branded shoes. 

"The enforcement staff has been directed to ensure deterrence in future and to make sure that unscrupulous elements may not use air travel to circumvent the recently imposed ban," the Pakistan Customs added. 


Ahead of ex-PM Khan’s march, Pakistan embassy warns expats against protests in UAE

Updated 24 May 2022

Ahead of ex-PM Khan’s march, Pakistan embassy warns expats against protests in UAE

  • Since Khan’s ouster, Pakistani expats have held demonstrations in their respective countries of residence
  • The embassy reminds ‘misuse’ and ‘out of context activity’ on social media is also prohibited in the UAE

ISLAMABAD: Pakistan’s embassy in Abu Dhabi on Tuesday asked Pakistani nationals to refrain from holding protest demonstrations in the United Arab Emirates (UAE) and indulging in “out of context” activities on social media. 

Khan last month became the first Pakistani prime minister to be ousted through a no-confidence vote in parliament. Since his ouster, hundreds of expats have been holding demonstrations in his favor in their respective countries of residence, including the United Arab Emirates (UAE). 

Seeking fresh elections in the country, the ousted prime minister recently announced an anti-government march to the Pakistani capital of Islamabad on May 25 and asked supporters in different parts of Pakistan to rally behind him. 

“This is to bring to the notice of all Pakistanis in the UAE that as per local laws, any kind of procession or protest is illegal,” the Pakistani embassy said in statement on Tuesday. 

“It is also informed that misuse and out of context activity on social media is also prohibited.” 

The embassy advised all Pakistani expats to abide by the local laws and refrain from indulging in any such activity. 

The Pakistani government has banned Khan’s protest march to Islamabad, Pakistani Interior Minister Rana Sanaullah announced at a news briefing on Tuesday, hours after a policeman was shot and killed during a crackdown on Khan’s supporters across the country. 

An official of Khan’s party had shot and killed the policeman when police visited his house, Information Minister Marriyum Aurangzeb said, adding the accused and his father had been arrested. 


Saudi Arabia finalizing extension of $3 billion deposit to Pakistan — finance minister

Updated 24 May 2022

Saudi Arabia finalizing extension of $3 billion deposit to Pakistan — finance minister

  • Mohammed Al-Jadaan says Pakistan is a key ally and the kingdom will stand behind the South Asian nation
  • On May 1, both countries said they would discuss possibility of supporting deposit by extending its term

DAVOS: Saudi Arabia is finalizing the extension of the kingdom’s $3 billion deposit to Pakistan, Saudi Minister of Finance Mohammed Al-Jadaan told Reuters.

“We are currently finalizing extending the $3 billion deposit to Pakistan,” he said on the sidelines of the World Economic Forum in Davos.

Saudi Minister of Finance Mohammed Al-Jadaan speaks at the World Economic Forum in Davos, Switzerland, on May 23, 2022. (WEF/File)

Last year, Saudi Arabia deposited $3 billion in Pakistan’s central bank to help support its foreign reserves.

Al-Jadaan did not offer further details, but on May 1 the two countries said in a joint statement that they would discuss the possibility of supporting the deposit by extending its term “or through other options.”

Pakistan is in dire need of external finances, hurt by high inflation, reserves declining to as low as less than two months’ of imports, and a fast-weakening currency.

Al-Jadaan said Pakistan was an important ally and the kingdom would stand behind the South Asian nation.

Uncertainty over the revival of an International Monetary Fund program has compounded volatility in the economy and markets amid a political crisis since a new government took over last month from ousted Prime Minister Imran Khan.


Joyland, first Pakistani film selected in Cannes, receives standing ovation at premiere

Updated 24 May 2022

Joyland, first Pakistani film selected in Cannes, receives standing ovation at premiere

  • Pakistani Saim Sadiq’s feature debut premiered in the festival’s Un Certain Regard strand
  • Widely shared videos showed the film getting a nearly 10-minute-long standing ovation

ISLAMABAD: Pakistani Saim Sadiq’s feature debut, “Joyland,” the first Pakistani film to be selected in Cannes, received a standing ovation after it premiered in the festival’s Un Certain Regard strand.

The film celebrates ‘transgenedr culture’ in Pakistan and tells the story of a family torn between modernity and tradition in contemporary Lahore.

Videos widely shared on social media showed the film getting a nearly 10-minute-long standing ovation.

“Standing ovation for ‘Joyland,’” actress and screenwriter Rose Harlean said.

Pakistani filmmaker Nabeel Qureshi congratulated Sadiq on the achievement.

“Such a moment of pride to see #Joyland receive a standing ovation at Cannes, and the immense praise its received,” actor Osman Khalid Butt posted.

A review in Variety described the film as the story of a patriarchal family that yearns for the birth of a baby boy to continue the family line, while their youngest son secretly joins an erotic dance theater and falls for an ambitious transsexual starlet.

Sadiq drew inspiration from his own family and a theater close to his home in Lahore.

“I came from a very morally upright, middle-class conservative family, and to find out that this other world exists, literally like a 10-minute drive from my house, that I never knew of. It’s so different, the world of the theater, where sexuality is not such a taboo, where women can get on stage and be in such positions of power,” the filmmaker told Variety.

“It’s the same people who are probably sitting at a family dinner in my house, who probably are later going in and watching those shows sometimes, and then pretending that they’re not the same person existing in both worlds. For me, it became an interesting way of examining myself, my family and the world around me with a particular focus on gender and intimacy,” Sadiq added.

Pakistan has one of the most progressive transgender cultures in the world. In 2018, Pakistan passed a landmark transgender rights bill that provides the country’s trans citizens with fundamental rights including prohibiting discrimination and harassment against them educationally and socially, allowing them to obtain driving licenses and passports and to change their gender in the national database at their own discretion.

“They were always very much part of the world that we lived in. They brought a certain sense of color and flamboyance and an owning up of desire in a certain way,” Sadiq said.

The filmmaker said that the progress of Pakistan’s transgender community had been so swift that he had to pause writing the script because some narratives about them weren’t accurate anymore.

“From the time they were struggling and they had all these superstitions around them to now when they are actresses, doctors and news anchors, it’s a big, big shift that I’ve been fortunate enough to see in my life,” Sadiq said.


‘Decisive moment’: Pakistan’s defiant ex-premier says will lead anti-government march as planned

Updated 24 May 2022

‘Decisive moment’: Pakistan’s defiant ex-premier says will lead anti-government march as planned

  • Imran Khan asks people not to fear the government’s heavy-handed tactics and work for ‘real independence’
  • The former prime minister addresses ‘the neutrals,’ says they will be judged for their actions during the current crisis

ISLAMABAD: Pakistan’s former prime minister Imran Khan announced his decision on Tuesday to lead an anti-government march to the federal capital shortly after the government refused to permit the protest demonstration, saying it was a “decisive moment” that would determine the future direction of the country.

Khan, who has been seeking fresh elections in the country since his ouster from power last month in a no-confidence vote, said on Sunday he would march on Islamabad on May 25 while asking his supporters from different parts of Pakistan to join him there.

The government ordered a crackdown against his top aides and staunch supporters in different cities on Monday night before declaring it would not allow Khan’s Pakistan Tehreek-e-Insaf (PTI) party to stage the planned sit-in.

“This is a decisive moment,” Khan said while addressing a news conference in Peshawar, asking his followers not to fear the government’s heavy-handed tactics.

“I will be leaving [Khyber] Pakhtunkhwa with one of the biggest caravans in history tomorrow to go to Islamabad,” he added.

Khan wondered why the government was taking stringent measures to stop the protest march while pointing out he had never broken a law in his entire political career.

Addressing the country’s top judiciary, he asked if it was going to allow the government to stop the march since it could put the institution’s reputation on the line.

He also mentioned “the neutrals” — a reference to the country’s military that described itself as “apolitical” while Khan’s administration was driven out of power – saying the nation would also judge them on the basis of their actions during the ongoing crisis.

“You have to decide which side are you standing on,” he maintained while adding that it was no longer an option for anyone to stay neutral anymore.

The former prime minister also warned the police and bureaucracy not to follow “unlawful directives” of the government.

“There are two ways from here: one leads to destruction while the other will take us to real independence,” he said.

Khan reiterated his march would bring “a sea of people” to Islamabad, making it impossible for anyone to stop it.