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.” 


Three killed as fire in world’s largest pine nut forest in Pakistan enters tenth day

Updated 19 May 2022

Three killed as fire in world’s largest pine nut forest in Pakistan enters tenth day

  • The fires have affected different parts of the Koh-e-Sulaiman mountain range in Pakistan’s southwest
  • National Disaster Management Authority helicopter arrived today to extinguish fire with little luck

QUETTA: A massive forest fire that has been raging for ten days in different parts of the Koh-e-Sulaiman mountains in southwest Pakistan intensified on Wednesday, with three people reported dead as provincial and federal disaster management authorities struggled late into Thursday to douse the flames.

The fire has consumed hundreds of trees dotting the Koh-e-Sulaiman — a mountain range connecting the Pakistani provinces of Balochistan, Punjab and Khyber Pakhtunkhwa — and forced residents of nearby villages to move to safer locations.

The Koh-e-Sulaiman region is home to the world’s largest Chilghoza (pine nuts) forest, annually producing about 640,000 kilograms of the edible seed. It also houses different species of animals and birds, including chukar partridges, ibex goats and rabbits, which are under threat from the fires.

The first fire started on May 9 in Musakhail district, lasting over a week and affecting pine nut trees in a 22 kilometers radius. The fire had barely died down when a second blaze erupted late on Wednesday in the Saraghalai area of district Sheerani, with three locals killed as they tried to help in rescue operations.

“Three local residents who tried to extinguish the fire got killed,” the top administrative official of the area, Zhob division commissioner Bashir Bazai, told Arab News. “Four people are still stranded as the district administration is making efforts to retrieve the bodies and rescue the stranded individuals.”

Smoke engulfs a pine nut forest in the Koh-e-Sulaiman mountain range in the Saraghalai area of district Sheerani in Pakistan's Balochistan province on May 19, 2022. (Photo courtesy: Forest Department Zhob)

Locals helping with the rescue operation said neither provincial nor federal authorities were equipped to handle the disaster.

“The federal and provincial departments dealing with the fire are not trained and equipped to extinguish the fire in the Saraghalai area since the flames are too high,” local activist Salmeen Khpalwak, who works on climate change and environmental protection projects in the area, told Arab News on Thursday. “The fire is heading toward villages and many families have migrated to safe locations.”

Firefighters and residents extinguish a fire that erupted in pine nut forest in district Musakhail in Pakistan's Balochistan province on May 16, 2022. (Photo courtesy: Forest Department Zhob)

Khpalwak said nearly 24 villages situated in the pine nut forest were currently in danger. He said the fire in Musakhail broke out during a thunderstorm when lightning hit but the reason behind the Saraghalai blaze was not yet known.

The National Disaster Management Authority (NDMA) sent a helicopter on Thursday to extinguish the fire, local officials said, though it was unable to put out the fire as it could not fly at a low altitude due to thick smoke and the mountainous terrain.

Muhammad Younus, who works with the Provincial Disaster Management Authority, said the NDMA had been requested to provide another helicopter due to the intensity of the fire.

“This morning, a helicopter splashed 3,500 liters of water fetched from the Sabakzai Dam about 45 kilometers away from the area engulfed in fire,” Atique Khan Kakar, a forest officer, told Arab News, “though it did not work.”


Amid economic crisis, Pakistan imposes ‘complete’ ban on imported cars, luxury items

Updated 19 May 2022

Amid economic crisis, Pakistan imposes ‘complete’ ban on imported cars, luxury items

  • Decision taken to “save precious foreign exchange,” PM Sharif says
  • Information minister says government has finalized fiscal management plan 

ISLAMABAD: The Pakistan government on Thursday announced a complete ban on imported cars and non-essential items in a latest effort to tackle a growing economic crisis in the country.  

Pakistan is currently facing dwindling foreign exchange reserves, as its currency continues a downward spiral against the US dollar and a deal for the revival of a $6 billion loan program with the International Monetary Fund (IMF) hangs in the balance.  

On Thursday, Prime Minister Shehbaz Sharif announced his decision to ban non-essential items, saying the move would help Pakistan save “precious foreign exchange.”

“We will practice austerity and financially stronger people must lead in this effort so that the less privileged among us do not have to bear this burden,” he tweeted.  

Information minister Marriyum Aurangzeb announced the government had finalized a fiscal management plan to deal with the economic crisis.  

“Yesterday, it was decided that for the first time in Pakistan’s history, all non-essential and luxury items will be banned completely,” she said. “These include food items, luxury items and all imported cars.”

Aurangzeb said Pakistan was currently facing “an emergency situation” and Pakistanis would see the impact of difficult decisions on foreign exchange reserves within two months.  

She said the government attached the highest priority to decreasing Pakistan’s dependency on imports and introducing an export-oriented economic policy.  

“Local industry, local producers and local industries in Pakistan will benefit from this [policy],” she said. “This economic plan will also promote employment in the country.”

The minister announced the government’s decision to ban imported mobile phones, home appliances, dry fruits, fruits, crockery items, private weapons, shoes and chandeliers.  

Other banned items include decoration pieces, sauces, frozen meat, sanitary ware, doors, window frames, fish, frozen fruits, carpets, reserved food items, tissue papers, furniture, makeup and shampoo items, confectionary, luxury mattresses and sleeping bags.  


Pakistan’s volatile currency hits another historic low of Rs200 against US dollar

Updated 19 May 2022

Pakistan’s volatile currency hits another historic low of Rs200 against US dollar

  • Pakistani rupee declined by 0.81 percent in interbank market on Thursday
  • It has so far plunged by over Rs17 since the arrival of new government

KARACHI: Pakistan’s national currency continued to slump on Thursday, hitting another historic low of Rs200 against the US dollar in the interbank market amid rising demand for import payments and uncertainty related to talks with the International Monetary Fund (IMF) for the resumption of a $6 billion loan program.

The rupee declined by 0.81 percent, or Rs1.61, during the trading session today.

The currency depreciation continued despite the ongoing negotiations between the IMF and Pakistani authorities which started in Doha, Qatar, on Wednesday.

“The dollar was trading above Rs200 in the interbank market due to increasing demand from importers to make foreign payments,” Zafir Paracha, general secretary of the Exchange Companies Association of Pakistan, told Arab News.

He said the remittance inflow was also slow since exporters were not bringing export proceeds to the country owing to the rising rupee-dollar parity which was benefitting them.

The rupee has declined by Rs17.07 against the greenback since the new government took control of the country last month.

Aadil Jillani, head of economic division at Trust Securities & Brokerage Limited, blamed the gap between external financing requirements and Pakistan’s repayment capacity on lack of policy response from the government.

“[This is] constantly bleeding markets and the economy,” he said. “This economic meltdown is taking its toll as the dollar has hit an all-time high and is trading above Rs200 in the interbank and open markets.”

Pakistan’s discussions with the IMF have become complicated due to an economic relief package amounting to $1.7 billion which was announced by former prime minister Imran Khan earlier this year.

Prime Minister Shehbaz Sharif is hesitant to remove the fuel and power subsidies included in the package since his administration fears public backlash amid rising inflation.

Economists have advised the government, however, to undo these subsidies or risk greater political and economic damage.


Pakistan top court bans transfers of investigating officers in ‘high-profile’ criminal cases

Updated 19 May 2022

Pakistan top court bans transfers of investigating officers in ‘high-profile’ criminal cases

  • The supreme court bars all investigating agencies from withdrawing high-profile cases pending before trial courts
  • The court expresses apprehension the country’s criminal justice system may be undermined by those in positions of authority

ISLAMABAD: Pakistan’s top court on Thursday stopped authorities from transferring officials involved in “high-profile” cases in different investigating agencies while seeking record of any new appointments and transfers made in the last six weeks.

The development took place only a day after the Supreme Court took suo motu notice on apprehensions that criminal justice system may be undermined by people in positions of authority.

According to news reports based on court documents, the Federal Investigation Agency (FIA) said last week it did not want to pursue a Rs16 billion money laundering case against Prime Minister Shehbaz Sharif and his two sons three days before a special court in Lahore was scheduled to frame charges against them.

The FIA denied, however, it was withdrawing the case against the prime minister in a statement subsequently released to the media.

“We want to ensure the sanctity and integrity of the criminal justice system and rule of law,” Chief Justice of Pakistan Umar Ata Bandial remarked while chairing a five-member larger bench to hear the case.

The court barred the authorities from withdrawing any high-profile cases while seeking a response from the government on transfers and appointments recently made in the FIA.

Attorney General of Pakistan Ashtar Ausaf tried to defend the transfers and postings, saying there might be “genuine reasons” behind them.

The court also issued notices to the National Accountability Bureau, director general FIA, secretary interior and others to explain their respective positions over the issue.

It directed the attorney general to ensure all record and evidence in high-profile cases were preserved and protected from any tampering.

“We hope the federal government will help us by explaining all these matters,” the chief justice said.

“We have been seeing such news for the last one month,” he continued. “We want to know about these matters because they are impacting the rule of law.”

The chief justice pointed out that an investigation officer, Dr. Rizwan, who was probing cases against Prime Minister Sharif and his son Hamza, was transferred and later died of heart attack.

“Why were the officers investigating the case against Hamza Shehbaz removed,” the chief justice asked. “We have to ensure independent and transparent working of the prosecution branch.”

The chief justice clarified the court proceedings were not meant to embarrass or hold anyone responsible, but “to uphold the rule of law.”
The court adjourned the case until May 27.


Pakistan says suspect in last week’s Karachi blast received instructions from Iran-based commander

Updated 19 May 2022

Pakistan says suspect in last week’s Karachi blast received instructions from Iran-based commander

  • Allah Dino, killed by police in a gunbattle on Wednesday, was trained in Iran, Counterterrorism Department says
  • Iran and Pakistan regularly accuse each other of harboring militants that launch attacks on the neighboring country

KARACHI: Counterterrorism authorities in Pakistan said on Thursday a suspect in an attack in the port city of Karachi last week had been trained in Iran and was receiving instructions from the Iran-based commander of a Pakistani separatist group.

One person was killed and several were injured in a bomb blast late on May 12 in the Saddar neighborhood of Karachi. The assault was claimed by the little-known Sindhudesh Revolutionary Army (SRA), a dissident faction fighting for independence in the province of Sindh.

The attack came two weeks after a female suicide bomber killed four people, including three Chinese nationals, in an attack on a minibus carrying staff from a Beijing cultural program at Karachi University.

In a press release on Thursday, the Counterterrorism Department for Sindh said special investigation teams formed by the CTD in the wake of the latest spate of attacks were able to identify a number of suspects through intelligence sources and the use of technology.

Based on the information, police on Wednesday traced three suspects in the Saddar attack as they traveled by motorcycle to transport explosives in Karachi on the instructions of what the CTD said was an Iran-based SRA commander called Asghar Shah. In a gunbattle with the three suspects, two identified as Allah Dino and Nawab Ali were killed while a third suspect fled the scene.

“The accused [Allah Dino] had been taking instructions from Asghar Shah, who operates his group [of the SRA] from Iran,” Syed Khurram Ali Shah, a senior CTD official, told reporters on Thursday.

“The eliminated terrorist Allah Dino was a master of bomb-making and he got his military training from neighboring country Iran,” the CTD press release said.

Iran and Pakistan regularly accuse each other of harboring militants that launch attacks on the neighboring country. Both nations deny state complicity in such attacks.