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

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Updated 14 January 2022
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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 bans new hotel construction around tourist lakes

Updated 7 sec ago
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Pakistan bans new hotel construction around tourist lakes

  • Unregulated construction of hotels, guest houses in Gilgit-Baltistan has sparked major environmental concerns
  • The region is home to towering peaks looming over Old Silk Road, cherry orchards, glaciers and ice-blue lakes

GILGIT: Pakistan will ban for five years the construction of new hotels around picturesque lakes in the north that attract tens of thousands of tourists each year, a government agency said.

Unregulated construction of hotels and guest houses in Gilgit-Baltistan — which boasts around 13,000 glaciers, more than any other country on Earth outside the polar regions — has sparked major concerns about environmental degradation.

The natural beauty of the region has made it a top tourist destination, with towering peaks looming over the Old Silk Road, and a highway transporting tourists between cherry orchards, glaciers, and ice-blue lakes.

However, in recent years construction has exploded led by companies from outside the region, straining water and power resources, and increasing waste.

“If we let them construct hotels at such pace, there will be a forest of concrete,” Khadim Hussain, a senior official at the Gilgit-Baltistan Environmental Protection Authority told AFP on Friday.

“People don’t visit here to see concrete; people come here to enjoy natural beauty,” he added.

Last month, a foreign tourist posted a video on Instagram — which quickly went viral — alleging wastewater was being discharged by a hotel into Lake Attabad, which serves as a freshwater source for Hunza.

The next day, authorities fined the hotel more than $5,000.

Asif Sakhi, a political activist and resident of the Hunza Valley, welcomed the ban.

“We have noticed rapid changes in the name of tourism and development,” he said, adding hotel construction was “destroying our natural lakes and rivers.”

Shah Nawaz, a hotel manager and local resident of the valley, also praised the ban, saying he believes “protecting the environment and natural beauty is everyone’s responsibility.”


What is The Resistance Front, designated by US as ‘terrorist’ group?

Updated 30 min 46 sec ago
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What is The Resistance Front, designated by US as ‘terrorist’ group?

  • US designation follows April attack in Kashmir that killed 26, later claimed by group online
  • Indian officials link TRF to Lashkar-e-Taiba, Islamabad denies official complicity in attack 

The US government has designated The Resistance Front, also known as the Kashmir Resistance, as a ” foreign terrorist organization” following an April 22 militant attack in Indian Kashmir that killed 26 people. The group initially took responsibility for the attack in Pahalgam before denying it days later. Following are some facts about the group.

WHAT IS TRF?
TRF emerged in 2019 and is considered an offshoot of the Pakistan-based Lashkar-e-Taiba, according to the South Asia Terrorism Portal, a Delhi-based think tank.
Indian security officials said TRF uses the name Kashmir Resistance on social media and online forums, where it claimed responsibility for Tuesday’s attack in Indian Kashmir’s Pahalgam area.
Lashkar-e-Taiba, listed as a foreign terrorist organization by the United States, is the Islamist group accused of plotting attacks in India and in the West, including the three-day assault on Mumbai in November 2008.
“This is basically a front of the LeT. These are groups which have been created over the last years, particularly when Pakistan was under pressure from the Financial Action Task Force and they were trying to create a pattern of denial that they were involved in terrorism in Jammu and Kashmir,” said Ajai Sahni, head of the South Asia Terrorism Portal.

HOW HAS THE PROBE ADVANCED?
On June 22, India’s anti-terror National Investigation Agency said it had arrested two men who harbored three militants involved in the Pahalgam attack.
The agency said in a statement that the arrested men had revealed the identities of the attackers, and confirmed they were Pakistani nationals affiliated to the
Lashkar-e-Taiba. Islamabad denies any involvement. 

WHAT HAS THE GROUP DONE?
The group has not previously had any large incidents attributed to it, according to Sahni.
“All TRF operations are essentially LeT operations. There will be some measure of operational freedom as to where they hit on the ground, but the sanction would have come from the LeT,” Sahni said.

WHAT DOES INDIA SAY ABOUT TRF?
India’s interior ministry told parliament in 2023 that the group had been involved in the planning of killings of security force personnel and civilians in Jammu and Kashmir.
The group also coordinated the recruitment of militants and the smuggling of weapons and narcotics across the border, the ministry said.
Intelligence officials told Reuters that TRF had also been issuing online threats against pro-India groups for the past two years.

WHAT DOES PAKISTAN SAY?
Pakistan has denied that it supports and funds militants in Kashmir, saying it offers only moral and diplomatic support. 


Pakistani graduates complete advanced agriculture training in China under PM-backed initiative

Updated 17 min 7 sec ago
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Pakistani graduates complete advanced agriculture training in China under PM-backed initiative

  • The agriculture sector contributes nearly a quarter of Pakistan’s gross domestic product, employs 37 percent of national labor force
  • Pakistan decided to send 1,000 graduates to China to train in modern agricultural techniques after PM Sharif’s visit to Shaanxi last year

ISLAMABAD: A first batch of around 300 Pakistani graduates have successfully completed advanced agriculture training in China’s Shaanxi province, Prime Minister Shehbaz Sharif announced on Friday, describing the development as “very heartening.”

Pakistan decided to send nearly 1,000 graduates to China to train in methods and techniques to enhance Pakistani agricultural production following Sharif’s visit to the Chinese agricultural, industrial and educational hub of Xi’an, Shaanxi in June last year.

In a post on X, Sharif thanked the Chinese leadership, the Shaanxi government and the universities that imparted hands-on training to Pakistani graduates as well as appreciated the Pakistani national food security ministry, higher education commission and the Pakistani embassy for their hard work.

“Very heartening to know that the first batch of around 300 Pakistani agriculture graduates have successfully completed their hands-on practical training in Shaanxi Province, China, in important areas of water saving irrigation, seed production, animal husbandry, agriculture production and prevention of post-harvest losses,” he said.

The agriculture sector contributes nearly a quarter of Pakistan’s gross domestic product (GDP) and employs 37 percent of the national labor force, according to the United Nations’ Food and Agriculture Organization.

However, a fast-growing population, climate change and poor resource management have greatly impacted Pakistan’s crops in recent years, prompting officials to ponder alternative ways to enhance production.

Experts say building water reservoirs, restoring wetlands and promoting drought-tolerant crop varieties is vital to mitigating recurring and intensifying drought risks in the country.

“Rainwater harvesting, groundwater recharge and the adoption of modern irrigation methods like drip and sprinkler systems are no longer optional,” Muhammad Saleem Shaikh, a spokesperson for Pakistani climate change ministry, said in Jan. this year.

“They are critical tools in our survival weaponry.”


Slashed US aid showing impact as Congress codifies cuts

Updated 43 min 8 sec ago
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Slashed US aid showing impact as Congress codifies cuts

  • Nearly 500 metric tons of high-nutrition biscuits, meant to keep alive malnourished children in Afghanistan and Pakistan, were incinerated after expiration in Dubai
  • But State Department spokeswoman Tammy Bruce took a more defiant tone on Thursday, saying the biscuits represented less than one percent of US global food aid

WASHINGTON, US: The United States’ destruction of a warehouse worth of emergency food that had spoiled has drawn outrage, but lawmakers and aid workers say it is only one effect of President Donald Trump’s abrupt slashing of foreign assistance.

The Senate early Thursday approved nearly $9 billion in cuts to foreign aid as well as public broadcasting, formalizing a radical overhaul of spending that Trump first imposed with strokes of his pen on taking office nearly six months ago.

US officials confirmed that nearly 500 metric tons of high-nutrition biscuits, meant to keep alive malnourished children in Afghanistan and Pakistan, were incinerated after they passed their expiration date in a warehouse in Dubai.

Lawmakers of the rival Democratic Party said they had warned about the expiring food since March. Senator Tim Kaine said that the inaction in feeding children “really exposes the soul” of the Trump administration.

Michael Rigas, the deputy secretary of state for management, acknowledged to Kaine that blame lay with the shuttering of the US Agency for International Development (USAID), which was merged into the State Department after drastic cuts.

“I think that this was just a casualty of the shutdown of USAID,” Rigas said Wednesday.

State Department spokeswoman Tammy Bruce, however, took a more defiant tone Thursday, saying the biscuits represented less than one percent of US global food aid, using figures that appeared to come from before Trump’s cutbacks.

“We will not be lectured about the issue of food aid or what we do for the rest of the world,” she said.

The Atlantic magazine, which first reported the episode, said that the United States bought the biscuits near the end of Biden administration for around $800,000 and that the Trump administration’s burning of the food was costing taxpayers another $130,000.

For aid workers, the biscuit debacle was just one example of how drastic and sudden cuts have aggravated the impact of the aid shutdown.

Kate Phillips-Barrasso, vice president for global policy and advocacy at Mercy Corps, said that large infrastructure projects were shut down immediately, without regard to how to finish them.

“This really was yanking the rug out, or turning the the spigot off, overnight,” she said.

She pointed to the termination of a USAID-backed Mercy Corps project to improve water and sanitation in the turbulent east of the Democratic Republic of Congo. Work began in 2020 and was scheduled to end in September 2027.

“Infrastructure projects are not things where 75 percent is ok. It’s either done or it’s not,” she said.

The House of Representatives is expected late Thursday to finalize the end of funding for what White House Press Secretary Karoline Leavitt called “$9 billion worth of crap.”

It includes ending all $437 million the United States would have given to several UN bodies including the children’s agency UNICEF and the UN Development Programme. It also pulls $2.5 billion from development assistance.

Under pressure from moderate Republicans, the package backs off from ending PEPFAR, the anti-HIV/AIDS initiative credited with saving 25 million lives since it was launched by former president George W. Bush more than two decades ago.

Republicans and the Trump-launched Department of Government Efficiency, initially led by tycoon Elon Musk, have pointed to projects they argue do not advance US interests.

“We can’t fund transgender operas in Peru with US taxpayer dollars,” House Speaker Mike Johnson told reporters, an apparent reference to a US grant under the Biden administration for the staging of an opera in Colombia that featured a transgender protagonist.

The aid cuts come a week after the State Department laid off more than 1,300 employees as Secretary of State Marco Rubio ended or merged several offices, including those on climate change, refugees and human rights.

Rubio called it a “very deliberate step to reorganize the State Department to be more efficient and more focused.”

Senate Democrats issued a scathing report that accused the Trump administration of ceding global leadership to China, which has been increasing spending on diplomacy and disseminating its worldview.

The rescissions vote “will be met with cheers in Beijing, which is already celebrating America’s retreat from the world under President Trump,” said Jeanne Shaheen, the top Democrat on the Senate Foreign Relations Committee.


Five private firms pitch routes as Pakistan eyes Gwadar-Gulf ferry corridor

Updated 39 min 4 sec ago
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Five private firms pitch routes as Pakistan eyes Gwadar-Gulf ferry corridor

  • Five companies submit proposals as Islamabad reviews technical, financial feasibility of Gulf route
  • Plan aims to position Gwadar as key maritime hub connecting South Asia, Gulf and Central Asia

KARACHI: Pakistan has been mulling routes for a ferry service it plans to launch to connect its southwestern Gwadar port with the Gulf region, the country’s maritime affairs ministry said on Friday.

The statement came after a meeting presided over by Federal Minister for Maritime Affairs Junaid Anwar Chaudhry to review matters relating to the proposed ferry service.

Officials at the meeting reviewed technical and financial aspects of ferry operations, according to the ministry. Five privately-owned firms submitted their proposals, showing growing interest of the private sector.

“The ferry service will promote regional connectivity and trade,” Chaudhry was quoted as saying by his ministry. “It is expected to ease movement of passengers and goods from Gulf countries.”

Gwadar, situated along the Arabian Sea, lies at the heart of the China-Pakistan Economic Corridor (CPEC), under which Beijing has funneled tens of billions of dollars into massive transport, energy and infrastructure projects in Pakistan.

Pakistani officials say the geostrategic location of the southwestern Pakistani coastal town in the Balochistan province offers the shortest trade route to the Gulf and landlocked Central Asian states, highlighted its potential as a regional transshipment hub.

During the meeting, Chaudhry telephoned Balochistan Chief Minister Sarfaraz Bugti and discussed provincial cooperation with him, according to the maritime affairs ministry. Bugti assured his full cooperation for the project.

“The ferry service will highlight Gwadar on the international maritime map,” Chaudhry added.

The development comes amid Pakistan’s efforts to capitalize on its geostrategic location to boost transit trade as it slowly recovers from a macroeconomic crisis under a $7 billion International Monetary Fund (IMF) program.

The country also plans to cut container dwell time at its seaports by up to 70 percent to improve trade competitiveness and ease congestion, while it last month reduced port charges for exporters by 50 percent at the second largest Port Qasim.