The Federal Investigation Agency (FIA) has decided to approach the Pakistan Telecommunication Authority (PTA) to get websites dealing in cryptocurrencies in the country explicitly banned and outlawed.
Local reports and sources have confirmed that the federal watchdog is exploring a multitude of regulatory avenues to tighten its hold on the local crypto space, with the aim to prevent online fraud and money laundering through the instrument’s ‘untraceable’ network.
FIA Director-General, Sanaullah Abbasi, recently spoke at a press briefing after meeting a delegation of senior officials from the State Bank of Pakistan (SBP) at the Cyber Crime Circle Office and told reporters about the ongoing progress toward addressing digital/virtual assets.
“Cryptocurrencies have given fraud a new dimension,” he said, and added that the regulator “will approach the Pakistan Telecommunication Authority for blocking websites dealing in cryptocurrencies to prevent fraud and possible money laundering”.
It was highlighted in the meeting that there is no section of the Prevention of Electronic Crimes Act, 2016, the Foreign Exchange Remittance Act, 1947 (FERA), or the Anti-Money Laundering Act 2010 (AMLA) that deals with the illegal use or misuse of cryptocurrencies. There is also no regulatory framework for virtual asset service providers (VASPs) to comply with the FATF regulations.
It was also disclosed that the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) had adopted a ‘prohibited approach’ and had issued warnings to citizens to discourage them from dealing with digital/virtual currencies.
The world of cryptocurrencies has been rocked by a number of regulatory quakes in Pakistan in the last few weeks alone as local authorities appear to be intensifying their crackdown on illicit sources of financing.
The Federal Investigation Agency (FIA) recently initiated a probe against a mega-scam involving 11 Binance-linked applications that fraudsters had used to loot over $100 million (Rs. 17.68 billion) from Pakistani investors. While the exact figure is unknown, unofficial data suggests that over 37,000 people in Faisalabad alone were duped after depositing money in bogus crypto schemes that had promised huge returns.
Officials privy to the matter believe that the legal ambiguity around digital currency trade has made it easier for Pakistanis to fall victim to such financial scams.