Pakistan establishes a special unit to combat crypto crime: division of powers and a new phase of regulation
The Federal Investigation Agency (FIA) of Pakistan has officially launched a specialized unit aimed at investigating crimes involving digital assets. The main focus is on combating money laundering and terrorist financing through cryptocurrencies. This is a logical step amid the global tightening of control over virtual currencies.
The new structure is integrated into the National Command and Control Center (NC3), which combines several key areas: anti-money laundering units, cyber patrolling, open-source intelligence, darknet monitoring, and the Interpol coordination department. Regulatory functions remain with the Pakistan Virtual Assets Regulatory Authority (PVARA), which handles licensing of market participants and development of the regulatory framework.
Clear division: who is responsible for what
Director of the FIA Anti-Terrorism Directorate, Muhammad Athar Waheed, emphasized that the new unit will exclusively deal with criminal aspects of digital asset use, while PVARA will focus on licensing, oversight, and developing rules for the industry. According to him, authorities are also preparing regulations setting maximum timeframes for conducting investigations — an important step to enhance the efficiency and transparency of law enforcement work.
Waheed called on the National Cyber Crimes Investigation Agency and the Anti-Narcotics Force of Pakistan to create similar structures, indicating a comprehensive approach by authorities to combat crypto crime at all levels.
Pakistan is forming a full-fledged regulatory ecosystem
In April, the State Bank of Pakistan revoked a 2018 circular that blocked banks from dealing with cryptocurrencies. Now, financial institutions can open accounts for virtual asset service providers (VASPs) that have received preliminary regulatory approval — a No Objection Certificate (NOC). Full operations will only become available after obtaining a final license from PVARA. Currently, the agency is accepting NOC applications, while the full VASP licensing regime is still under development.
Simultaneously, authorities are engaging in dialogue with religious leaders regarding the status of digital assets. In June, the Jamia Darul Uloom Karachi seminary ruled that cryptocurrency is not recognized as property under Islamic law and cannot be used as a means of payment. However, PVARA Chairman Bilal bin Saqib called for distinguishing between speculative tokens and backed digital instruments — such as fully reserved stablecoins, tokenized gold, and Islamic bonds on the blockchain. This approach appears pragmatic and could serve as a basis for a compromise between religious norms and the needs of the digital economy.
Recall that in September 2025, PVARA already invited leading global crypto companies to submit applications to participate in the country's emerging digital economy. Pakistan is clearly betting on creating a balanced and secure environment for the crypto industry, and the establishment of a specialized investigative unit is an important element of this strategy.
Expert commentary: The separation of powers between the regulator and law enforcement is the right step, reducing the risk of conflicts of interest and increasing the effectiveness of oversight. However, the key challenge remains the uncertainty surrounding the religious status of cryptocurrencies. If Pakistan can find a formula where backed digital assets receive Sharia approval, the country could become one of the first major Islamic hubs for the crypto industry.